South Koreans’ investment in U.S. stocks jumped nearly 40 percent year over year in April as they sought out higher-return alternatives to local equities that have remained lackluster unlike bullish U.S. peers.
Korean investors traded $2.07 billion worth of stocks in the U.S. in April, up 29.9 percent from the same month a year earlier, according to the Korea Securities Depository on Thursday. Their purchases of U.S. stocks reached $1.12 billion, up 38.8 percent over the same period.
American stocks accounted for a lion’s share of 67.4 percent of the total trade turnover in offshore securities placed by Korean nationals, while Hong Kong stocks made up 16.1 percent, Chinese 7.9 percent, Japanese 6.1 percent, and those in Europe 0.1 percent.
Korean investors’ interest in American stocks has been swayed by U.S. market performance. In December when the U.S. stock market tumbled, Korean nationals reduced their purchases in U.S. stocks to $780 million but have gradually increased their holdings entering this year as the market regained vitality. They owned U.S. stocks worth $1.05 billion in January, $1.09 billion in February, and $1.15 billion in March.
So far this year, until Tuesday, the Dow Jones has gained 11.3 percent while the S&P 500 has added 15.0 percent and the Nasdaq 20.0 percent. Korea’s main bourse Kospi has climbed only 6.2 percent over the same period. Accordingly, outstanding deposits for U.S. stock accounts held by Korean nationals reached $6.0 billion as of Apr. 30, sharply up from previous month’s $5.6 billion.
Korean investors’ favorite U.S. stocks were tech majors, based on trade turnover from Apr. 1 to May 7. Their No. 1 pick was Amazon.com, followed by Google parent Alphabet, Microsoft, and Apple. Visual computing technology company Nvidia, electric car giant Tesla, and streaming pioneer Netflix also were among the top 10.
By Kim Je-lim and Cho Jeehyun
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]