Foreigners buy $16bn South Korean stocks

Foreign investors bought a net 17.6 trillion won (around 16 billion U.S. dollars) worth of South Korean stocks listed on Seoul bourse last year despite greater global uncertainties, the financial watchdog said Monday. Foreign net buying totaled 17.6 trillion won in 2012, turning into net buyers after selling a net 9.6 trillion won worth of local shares in 2011, according to the report by the Financial Supervisory Service (FSS). As of the end of December 2012, overseas investors held 411.6 trillion won in stocks, accounting for 32.2 percent of the total market capitalization. The figure was up from 30.4 percent a year before. European investors led the 2012 foreign buying. Investors from Europe purchased a net 9.9 trillion won of local stocks in 2012 after dumping a net 15.1 trillion won worth of stocks in 2011. Despite the global economic uncertainties, South Korea's fiscal soundness and credit rating upgrade attracted foreign investors last year to buy a net 38 trillion won of listed South Korean bonds, according to the FSS. Net bond investment, net purchases less the value of bonds maturing, totaled 7.4 trillion won in 2012, up from 7.1 trillion won a year earlier. European investors invested a net 4.6 trillion won worth of local bonds, and U.S. investors invested a net 2.4 trillion won. As of end-December, offshore investors held 91 trillion won in local listed bonds, taking up 7 percent of total listed bonds. The watchdog noted that government agencies from abroad increased purchases of South Korea's long-term government bonds, saying that the remaining maturity of bonds held by foreigners averaged 2.59 years in 2012, up from 2.43 years in 2011.