Foreigners bought South Korean stocks and bonds worth 5.8 trillion won ($5.45 billion) last month, sending the outstanding foreign holdings to over 500 trillion won ($469.66 billion), the financial watchdog said Friday.
Offshore investors purchased a net 3.9 trillion won worth of local listed stocks in December, while making a net investment into local listed bonds worth 1.9 trillion won, according to the Financial Supervisory Service (FSS).
Foreign holdings of domestic stocks and bonds totaled 502.6 trillion won as of the end of December. It breached the 500- trillion-won mark for the first time in the country's history just 27 months after topping the 400-trillion-won level in September 2010.
Foreigners bought local shares last month amid easing concerns over the US fiscal cliff and the eurozone fiscal crisis. The end of the presidential election in Seoul eased political uncertainties, contributing to foreign stock buying, the watchdog said.
Both European and the US investors purchased local stocks worth 2.13 trillion won and 1.43 trillion won each last month. Chinese investors bought a record monthly high of local shares worth 694.2 billion won, keeping their buying streak for the fifth consecutive month.
French investors turned into net buyers by snapping up a net 1. 02 trillion won worth of stocks, but Japanese investors kept their selling streak for five straight months with 247.1 billion won worth of stocks sold last month. British investors continued to sell local shares, but their net selling reduced to 66.7 billion won in December from 1.05 trillion won in the previous month.
As of the end of December, foreign holdings of local listed stocks reached 411.6 trillion won, or 32.2 percent of the total market capitalization, according to the FSS. The figure was up 17. 8 trillion won from a month earlier.
The largest owner was US investors who held 164.3 trillion won in local stocks, or 39.9 percent of total foreign ownership, as of end-December. It was followed by the European investors with 130.6 trillion won, British investors with 45.9 trillion won and Luxembourg investors with 26.9 trillion won.
Meanwhile, foreign net investment in local listed bonds, calculated by net bond buying minus the amount of maturing debts, expanded by 1.9 trillion won in December due to an increase in foreign purchases of monetary stabilization bond (MSB), according to the FSS.
Excluding the maturing debts, foreign bond transactions posted a net buying worth 6 trillion won last month, logging the largest in six months.
European fund worth 1.06 trillion won flowed out of the local bond market in December due to massive maturing debts, but net investment by US investors increased by 1.49 trillion won, keeping the upward trend for the fourth consecutive month.
Hong Kong and Singaporean investors recorded net investment worth 999.4 billion won and 202.3 billion won each in December, but net investment by Luxembourg and French investors contracted by 534.1 billion won and 500.5 billion won respectively.
Foreign holdings of local listed bonds amounted to 91 trillion won, or 7 percent of total ownership, as of the end of December. The figure marked the record monthly high in the country's history.
The largest owner was European investors who held 28.5 trillion won in local bonds, or 31.3 percent of total foreign holdings, as of end-December. It was followed by US investors with 18.7 trillion won, Luxembourg investors with 13.6 trillion won and Chinese investors with 10.8 trillion won.