Foreign holdings of South Korean bonds hit a record high of 233.53 trillion won in July.



The Korea Financial Investment Association announced Aug. 10 that foreign bond holdings in the South Korean market rose by 4.6 trillion won and hit an all-time high of 233.534.1 trillion won last month.

In July this year, their net purchase of bonds amounted to 5.8 trillion won, comprising 2.4 trillion won of government bonds, 1.8 trillion won of currency stabilization bonds and 1.6 trillion won of bank bonds. The net purchase is linked to high yields relative to the sovereign credit rating and a no-tax plan linked to the global government bond index.

Domestic bond yields have fallen significantly over the past month. Specifically, the yield on three-year government bonds fell 0.541 percentage points to 3.009% and two-year and one-year bonds fell 0.45 percentage points and 0.079 percentage points to 3.052. % and 2.902%, respectively.

Last month, monthly bond issuance fell from 4.9 trillion won to 66 trillion won. Total bonds outstanding were 2,580.1 trillion won, with net issuance of government bonds, specific laws and financial bonds showing an increase of 20.3 trillion won.

Corporate bond issuance fell 1.5 trillion won to 6.4 trillion won as interest rate volatility increased. The credit spread widened due to concerns about corporate performance and a drop in investment demand. ESG bond issuance increased by 236.8 billion won to 6.4515 billion won.

A total of 19 demand forecasts, totaling 1.588 trillion won, were made in the corporate bond market, down 1.112 trillion won year-on-year. The total stake was 2.481 billion won, down 7.520 billion won from a year ago. The participation/forecast ratio fell from 329% to 156.2% in one year. Over-the-counter bond trading volume fell 22.6 trillion won to 374.3 trillion won, and the CD market yield rose 0.69 percentage points to 2.73 percent. There were four QIB bond registrations with a combined size of 2.0872 billion won. Since the first record in July 2012, the cumulative total is 128.7 trillion won divided into 333 cases.