SEOUL, KOREA - Since the beginning of quantitative easing by U.S. monetary authorities in 2009, the total amount of funds flowed into Korean financial markets has been 36 trillion won, accounting for a little more than 50 percent of all funds invested by foreigners during the same period. 

 

According to the Financial Supervisory Service and the Korea Exchange on November 3, for the past five and a half years from March 2009 when the Federal Reserve started purchasing bonds from the market to September this year American investors have net-bought Korean stocks worth 35,834 billion won (US$33.2 billion).

 

The U.S. central bank halted a third round of quantitative easing, "QE3," at the end of October. During the same period, the total net-buying volume by foreign investors including American ones was 69,726 billion won. The share of American money in total was 51.4 percent.

 

The net-buying amount by U.S. investors has fluctuated widely since 2009. For the nine-month period from March 2009 to the end of the year, the net-buying volume was 8,029 billion won, followed by 14,913 billion won in 2010, 5,163 billion won in 2011, and 1,017 billion won in 2012. Last year it was 2,714 billion won and 3,998 billion won for the first nine months of this year. The country with the second largest amount of net-bought stocks for the five-and-a-half year period was China with 9,109 billion won.

 

Kim Hak-gyun, head of investment strategy with KDB Daewoo Securities, said, "It is unlikely for the America-originated money to stop flowing in abruptly. On the other hand, the incentive for foreign investors to start gobbling up Korean stocks is weak because the Chinese economy is showing signs of losing steam while Korea's stimulus measures are not likely to work the magic any time soon."

 

Article provided by The Korea Economic Daily