Institutions' foreign securities holdings rise to record high in Q2: BOK

South Korean institutions bolstered their foreign securities holdings to a record high in the second quarter, according to the Bank of Korea (BOK) data released on Tuesday. The total value of foreign securities, which includes stocks, bonds, and Korean paper, held by local institutional investors reached a staggering US$549.68 billion by the end of June, marking a significant increase of $46.72 billion compared to the previous quarter.

This surpasses the previous record of $507.83 billion set in the fourth quarter of the previous year.

The surge in foreign securities holdings can be primarily attributed to the robust performance of overseas stock markets. The Nasdaq Composite Index climbed 21.4%, while the S&P 500 gained 14.9% during the same period. Additionally, the Japanese Nikkei 225 experienced an impressive surge of 37.2%, contributing to the overall growth in foreign securities investments.

In terms of investment types, local institutions' exposure to foreign stocks increased by $45.76 billion on a quarter-over-quarter basis, reaching a total of $334.27 billion. However, the value of their foreign bond holdings remained unchanged at $181.85 billion. The BOK attributed the rise in stock holdings' valuations to the strong rally in major stock markets across key economies worldwide during the three-month period under review.