61-month High
The Bank of Korea announced on April 12 that foreign investors invested US$3.15 billion and US$2.34 billion in the South Korean stock and bond markets in March this year, respectively. The combined amount increased by US$560 million in one month and reached a 61-month high.
In the meantime, the Financial Supervisory Service of South Korea announced on April 10 that they purchased shares worth 3.2 trillion won (US$2.8 billion) in the KOSPI market and 100 billion won (US$90 million) in the KOSDAQ market during the period. U.S. investors recorded a net purchase of 3.9 trillion won (US$3.5 billion), followed by Cayman Islands (200 billion won or US$180 million) and Canada (200 billion won or US$180 million). Meanwhile, British and Israeli investors recorded a net sale of one trillion won (US$900 million) and 400 billion won (US$360 million), respectively.
Last month, U.S. investors accounted for 41.8% (220.8 trillion won or US$198 billion) of the total shareholdings by foreign investors. They were followed by those in Europe (28.4%, 150.2 trillion won or US$135 billion), Asia (12.6%, 64.8 trillion won or US$58 billion) and the Middle East (4.6%, 24.3 trillion won or US$21 billion).
The total value of the won-denominated bonds held by foreign investors increased to 98.7 trillion won (US$88 billion), too. Their net investment in short-term bonds such as monetary stabilization bonds reached three trillion won as they focused on foreign exchange gains. China’s net investment in won-denominated bonds, which totaled less than 100 billion won (US$90 million), resumed with its trade retaliation related to THAAD deployment in South Korea subsiding.
In March this year, the won-dollar exchange rate edged down from 1,130.7 won to 1,118.4 won per U.S. dollar. During the same period, the won-dollar exchange rate volatility edged up from 0.39% to 0.47%. According to the Bank of Korea, the U.S. Dollar Index (DXY) fell from 101.4 to 100.4 between February and March. The DXY is an indicator showing the average value of the U.S. dollar with respect to the six currencies including euro, yen and pound.