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Long-term Investment in Government Bonds Increases Last Year
Government Bond Turnover Ratio Falls
Long-term Investment in Government Bonds Increases Last Year
  • By Yoon Young-sil
  • January 13, 2020, 12:10
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The annual turnover ratio of government bonds fell last year as institutional investors’ long-term funds took up an increasing portion of investment in government bonds.

The Korea Financial Investment Association announced on Jan. 12 that the annual turnover ratio of government bonds in the over-the-counter bond market fell 27 percentage points to 312.64 percent in 2019. It is lower than the 403.8 percent level recorded during the global financial crisis of 2008.

The ratio amounted to 720 percent in 2013 but fell for the sixth consecutive year until 2019. In contrast, the annual turnover ratio of corporate bonds gradually increased from 61.19 percent to 66.05 percent last year. The ratio reached 109.65 percent in 2011, fell to 52.31 percent in 2016, and then rose for three years in a row.

“The decrease in the turnover ratio of government bonds is because institutional investors’ long-term funds took up an increasing portion,” said NH Investment & Securities analyst Kang Seung-won, adding, “Government bonds are for long-term investment purposes in most cases and, as such, it cannot be said that the government bond yield is directly related to the turnover ratio.”