SEOUL, March 6 (Xinhua) -- Foreign investors bought South Korean stocks and bonds in February after selling them in the prior month as strong won and expectations for policy rate cuts boosted demand, financial watchdog data showed Wednesday.
Foreigners purchased stocks and bonds listed on the main bourse worth 1.5 trillion won (1.39 billion U.S. dollars) and 3.5 trillion won each in February, according to the Financial Supervisory Service (FSS).
Foreign funds increased their holdings of local securities to a fresh record 514.9 trillion won as of the end of last month.
Improvement in global economic data and expectations for stable currency rate led foreigners to buy local listed stocks more. European investors raised their holdings of local shares after selling them in the previous month, and the offloading by U.S. investors reduced compared with a month before.
Chinese investors bought a record amount of stocks worth 1.24 trillion won in February, purchasing a total of 3 trillion over the past four months. Irish investors snapped up 1.3 trillion won in stocks over the past seven months.
As of the end of February, foreign holdings of local stocks were a record 421.2 trillion won, or 32.2 percent of the total market capitalization.
The largest owner was U.S. investors who held 165.1 trillion won in stocks, or 39.2 percent of the total foreign ownership, as of end-February. It was followed by European investors with 131 trillion won, British investors with 40.7 trillion won and Luxembourg investors with 27.4 trillion won.
Foreign funds worth 3.5 trillion won flowed into the domestic bond market in February, the largest since October 2010. The so- called foreign net investment was based on net bond buying minus maturing debts.
Offshore investors bought local listed bonds amid expectations for the South Korean currency's ascent against the dollar and policy rate cuts.
According to the minutes for Bank of Korea (BOK)'s Feb. 14 monetary policy meeting, one policymaker voted for further rate cuts, saying that uncertainty over the Japanese yen's depreciation and automatic spending cuts in the U.S. guaranteed easier monetary policy.
The BOK froze the benchmark seven-day repurchase rate at 2.75 percent at the February rate-setting meeting, keeping the rate on hold for four straight months. The decision was made by a 6-1 vote.
More European funds flowed into the local bond market, while U. S. investors shifted into net buyers of local listed bonds. Luxembourg and Thai investors turned into net buyers for the first time in four months and one month respectively.
Foreign holdings of domestic bonds reached a new high of 93.7 trillion won, or 7.1 percent of total ownership, as of the end of February.
The largest owner was European investors who held 30 trillion won in local bonds, or 32.1 percent of total foreign holdings, as of end-February. It was followed by U.S. investors with 19.4 trillion won, Luxembourg investors with 14.8 trillion won and Chinese investors with 11.2 trillion won respectively.