SEOUL, KOREA - The balance of bonds held by foreign investors has increased to 94.3 trillion won, up 2.6 percent from the previous low of 91.9 trillion won on December 9, dispelling the fears of an "exodus" of foreigners in December from the domestic bond market.
According to the Financial Supervisory Service and NH Investment & Securities on the 23rd, the balance of won-denominated bonds owned by foreigners was 94,282.1 billion won as of December 20. For the past 12 days since the 9th, the bond holding balance has increased by 2,357.5 billion won.
Since September this year, the balance has been in decline largely due to the volume of bonds whose maturity reaches at the end of every month. Up until December 9, as much as 5 trillion won worth of bonds came due, putting the bond balance at the nadir of 91.9 trillion won.
Starting on the 10th, however, the situation has changed. Foreign investors have increased their bond holdings quickly. Yoon Yeo-sam, bond trading unit head of KDB Daewoo Securities, said, "Foreign investors have kept buying Korean bonds on the grounds that there is no other alternative outlet in emerging markets and that the won-dollar exchange rate is likely to fall below the 1,050 won level within a year or two."
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