South Korea’s financial assets in the United States hit an all-time high in 2020

The value of South Korea’s financial assets in the United States hit an all-time high last year, supported by increased interest by local retail investors in the US stock market, central bank data showed on Wednesday. .

At the end of 2020, the stock of Asia’s fourth-largest financial assets invested in the United States increased by $ 114.8 billion year-on-year to $ 534.5 billion, according to preliminary data from the Bank of Korea.

This marks both a record total annual investment by South Korean entities in the United States and a record year-on-year gain for that number. Investments in financial assets in the United States accounted for 35.2 percent of total foreign investments.

Overall, South Korea’s stock of financial assets invested abroad rose $ 207.2 billion year-on-year to $ 1.519 billion in the cited period. Total investment last year also hit a record high.

Behind the United States, the financial assets of South Korean entities in the EU gained $ 40.3 billion to $ 291.9 billion during the same period, ranking second in terms of size and representing 19.2% of the cake. The size of financial assets in Southeast Asia ranked third, increasing by $ 20 billion year-on-year to $ 201.5 billion and accounting for 13.3% of the total.

Another key market, China, saw its financial assets from Korea increase from $ 16.7 billion to $ 155.5 billion.

“The record jump in financial assets abroad last year was due to an increase in overseas share purchases by local retail investors, due to a stock market rally,” an official said. BOK’s international investment position team under the economic statistics department. a briefing.

“Besides the United States, assets have also increased in the EU, Southeast Asia, Japan and other economies due to factors such as the notable gain of the Nasdaq and the weak trend of the dollar.” , added the manager.

Onlookers say that while Korea’s investment in the United States itself may have increased, gains in the U.S. stock market last year are also attributed to the record high. Last year, tech stocks propelled the Nasdaq to a 43.6% gain – its fifth best year ever – and the S&P 500 rose 16.3% in the same time frame. The Dow Jones added 7.2%.

By currency, financial assets abroad held in U.S. dollars stood at $ 861.4 billion at the end of 2020, or 56.7 percent of the total. Assets held in euros stood at $ 161.5 billion, or 10.6% of the pie.

By Jung Min-kyung ([email protected])

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