Increases More Than 10 Times during Past 10 Years

The amount of foreign currency securities deposited with the Korea Securities Depository (KSD) has exceeded US$100 billion for the first time in history.

Thanks to recent steep growth in Korean investors' direct cross-border stock investment, the amount of foreign currency securities deposited with the Korea Securities Depository (KSD) has exceeded US$100 billion for the first time in history.

According to the KSD, the amount of foreign currency securities under its custody totaled US$102.1 billion as of Nov. 26.

The amount of foreign currency securities deposited with the KSD has increased more than 10 times during the past 190 years. It increased from US$9.7 billion at the end of 2012 to nearly US$40 billion at the end of 2017 and exceeded US$70 billion at the end of 2020.

By market, the U.S. stock market accounted for 67.4 percent with US$68.81 billion, followed by the euro market with 21.1 percent or US$21.55 billion. Hong Kong stood at US$3.79 billion or 3.7 percent.

Along with the increase in the amount of deposited foreign currency securities, Korean investors' foreign securities settlement has also increased. In 2021, foreign stock settlement hit US$441.2 billion, up 36.4 percent from US$323.4 billion in 2020. The average annual growth rate over the past three years reached nearly 60 percent.

In terms of settlement amount, U.S. stocks accounted for 76.7 percent of the total, followed by European stocks with 17.4 percent and Hong Kong stocks with 3.4 percent.

Analysts say that the increase in the number of Koreans investing in overseas stocks was fueled by improved access to overseas stock markets and an increased interest in foreign stocks.

Korean investors preferred U.S. technology stocks, including Tesla, in 2021. As of Nov. 26, Tesla stocks worth US$14.82 billion were deposited with the Korea Securities Depository.

Tesla was followed by Apple (US$4.38 billion), Nvidia (US$3.02 billion), and Google's parent company Alphabet (US$2.2 billion).

What is notable is that companies listed on Japan, China and Hong Kong stock markets disappeared from the list of foreign stocks favored by Korean investors. The top five stocks deposited with the KSD in 2018 included first-ranked Amazon, Japan’s Goldwin (US$450 million), China’s Heng Rui Pharmaceutical (US$310 million), and Tencent (US$250 million).

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