SEOUL, Aug. 29 (Xinhua) -- Foreign securities held by South Korea's financial companies reduced in the second quarter as concerns emerged over an early exit of U.S. quantitative easing, central bank data showed Thursday.
Foreign currency-denominated securities invested by financial institutions stood at 66.9 billion U.S. dollars as of the end of June, down 2.3 billion dollars from three months earlier, according to Bank of Korea (BOK).
The second-quarter reduction came as financial firms refrained from investing into foreign securities amid rising market volatilities caused by the possible tapering of the Fed's bond purchasing program, the bank said.
It was also attributable to stock price declines in major investment destinations that caused investment losses, the central bank added. Stocks in China, Brazil and Europe dropped 14.5 percent, 15.8 percent and 0.8 percent each in the second quarter.
Outstanding overseas stocks held by local institutions reduced 1.78 billion dollars during the second quarter, and those for foreign bonds fell 200 million dollars in the quarter after rising 2.9 billion dollars in the prior quarter.
The Korea Paper investment declined 310 million dollars in the second quarter after increasing 1.34 billion dollars in the previous quarter. The Korean Paper refers to foreign currency- denominated securities sold overseas by the South Korean government, financial institutions and companies.