KOREAN NET

Image of Korean Treasury Bond (Yonhap News)

By Yoo Yeon Gyeong

Foreign investors own over 25% of long-term government bonds with maturities of 10 years or longer.

The financial data provider Yonhap Infomax on Oct. 16 said foreign investors held KRW 226.44 trillion worth of treasury bonds as of Oct. 14, of which long-term bonds with maturities of 10 years accounted for 25.07% with KRW 56.77 trillion.

The share rose to 20% for the first time in August last year (20.02%) and further to 25% (25.05%) in July this year for the first time in 11 months. It fell back to the mid-24% range but has clearly grown over 25% since last month.

The data reflects a surge in long-term bond investments thanks to higher confidence in the domestic economy, especially after expectations of Korea's entry into the World Government Bond Index (WGBI) this year.

"Funds tracking the WGBI have a high proportion of long-term investments in the private sector," Hyundai Motor Securities researcher Choi Je-min said. "The benefits of mid- to long-term bonds are seen to further rise stemming from the diversification effects of investors on the domestic market and inflow of long-term investment funds."

dusrud21@korea.kr