Chinese investors more than doubled their holdings of Korean bonds so far this year as part of efforts to diversify investment from the U.S. and Europe in the wake of the financial crisis.
Flush with cash, Chinese investors are putting money in the debt, stocks and real estate of Korea, which has been emerging from the global recession most robustly among rich countries.
Chinese invested a net total of 2.48 trillion won ($2.1 billion) in local bonds during the first seven months of the year, according to Financial Supervisory Service and industry data.
With the increase seen so far this year, the amount of local bonds held by Chinese investors rose to about 4.4 trillion won by the end of July, more than double the 1.87 trillion won recorded at the end of last year.
The figure for Chinese investors’ holdings is equivalent to 6.05 percent of all Korean bonds held by overseas concerns and came in at 71.9 trillion won at the end of last month.
In addition to the rapid rate of increase, the composition of Chinese investors’ Korean portfolios has also drawn attention.
According to industry data, the vast majority of Chinese funds were used to buy up treasury bonds. Non-treasury bonds accounted for only 200 million won of the 1.87 trillion won worth of bonds Chinese investors held at the end of last year.
The influx of Chinese funds is expected to continue this year, with some expecting as much as 4 trillion won worth of Korean treasury bonds to be snatched up by Chinese concerns by the end of the year.
Despite the increase, however, Korean won-denominated assets account for only 0.1 percent of China’s $2.45 trillion-foreign reserves, and experts say that the figure is unlikely to increase significantly in the near future.
Along with increasing the amount invested in Korean bonds, Chinese investors have been bolstering their Korean securities portfolio.
According to data compiled under China’s Qualified Domestic Institutional Investor scheme, the proportion of Chinese funds invested in overseas securities markets accounted for by investments in Korean securities jumped to a record high of 4.5 percent during the second quarter of the year.
Korea’s financial markets could also be experiencing a surge in the flow of China’s state-managed funds.
The China Investment Corp. is thought to be planning to diversify its portfolio, and has been receiving consultations from Korean securities firms.
The CIC manages about $200 billion of China’s sovereign wealth, and its securities portfolio has been heavily focused on North American markets.
About 36 percent of CIC’s investments were directed to securities last year, of which 44 percent are said to have been North American stocks.
The Social Security Fund that manages 776.6 billion yuan ($114 billion) is also planning to raise the proportion of its assets accounted for by overseas assets to 20 percent from the current 7 percent, raising interest in whether Korea will be among those that receive an influx of its capital.
댓글 없음:
댓글 쓰기