Foreign investors extend buying streak in South Korean stocks, bonds

SEOUL, January 14 (AJP) - Foreign investors were net buyers of South Korean stocks and bonds in December, extending net inflows to a fourth consecutive month.

Net foreign inflows into South Korean securities totaled $7.44 billion in December, according to the Bank of Korea’s report on international finance and foreign-exchange market trends released Wednesday. The figure marked the largest monthly inflow since September, when inflows reached $9.12 billion.

Bond purchases accounted for the bulk of the inflows, totaling $6.26 billion, while net stock buying came to $1.19 billion.

Bond inflows had surged to $11.81 billion in November, the highest monthly figure since the data series began in 2008. In December, foreign holdings of South Korean bonds that matured during the month reached $6.49 billion, the largest amount recorded for any December, the central bank said.

A BOK official said equity flows turned positive on expectations that rising memory chip prices would lift profitability at domestic semiconductor companies. Bond inflows, meanwhile, continued to be led by public-sector investors, even as sizable volumes of bonds matured.

South Korea’s credit default swap premium on government bonds averaged 22 basis points in December, down from 23 basis points a month earlier, indicating slightly improved perceptions of sovereign risk.