Foreigners buy S. Korean stocks in January on expected delay in Fed's rate hike

Source: Xinhua | 2019-02-14

Foreign investors bought South Korean stocks in the first month of this year on expected delay in the U.S. Federal Reserve's interest rate hike, central bank data showed on Wednesday.
Foreigners purchased a net 3.34 billion U.S. dollars of local listed stocks in January, the biggest foreign net purchase since May 2017, according to the Bank of Korea (BOK).
It came amid the rising expectations for the delayed rate hike in the United States. The Fed raised its target rate to a range of 2.25-2.50 percent in December last year, widening a gap with South Korea's policy rate of 1.75 percent.
Foreign fund of 3.23 billion U.S. dollars flowed out of the local bond market in January, marking the biggest net outflow of foreign capital since September 2017.
Offshore investors sold domestic bonds last month to lock in short-term profits amid the maturing debts, a part of which were not refinanced by foreigners.
The daily average volatility in the won/dollar exchange rate was 3.4 won per dollar in January, down from 4.6 won from the previous month.
Premium on the five-year credit default swap, which gauges sovereign risk for five-year government bonds, averaged 36 basis points in January, the lowest since November 2007.