Foreign investors unlikely to pour money into S. Korean bourse: report

SEOUL, April 26 (Yonhap) -- Foreign investors are unlikely to pour large sums of money into South Korea's stock market until global economic conditions stabilize, a report by a local think tank said Sunday.

The report published by the Korea Institute of Finance (KIF) said that while a
there is steady increase in foreign funds returning to the country, this may not
translate into a "rush" to buy local stocks and bonds.
"Funds that left the country last year are starting to come back, especially
since local companies and financial institutions have been able to successfully
sell overseas bonds," said KIF researcher Park Hae-sik.
He said such successes have helped alleviate concerns about South Korea's
liquidity situation, which caused the currency to slide sharply this year.
The total amount of foreign currency bonds sold abroad this year topped US$10.5
billion as of April 21, up from the $10.3 billion tallied for the same period in
2008.
Until February, foreign investors sold more stocks than they bought, but this
situation turned around last month.
The analyst, however, said that despite the weak Korean won vis-a-vis the U.S.
dollar, South Korean stocks cannot be considered "under-valued" compared to
shares in other emerging markets.
Park added that there is still a trend by global investors to seek safe
investment opportunities in developed markets as a means to reduce risk.
"All such conditions will effectively make it hard for large sums to start
flowing into the KOSPI, KOSDAQ or bond markets," the expert said.
He said that greater sales of South Korean bonds may inversely reduce the ability
of foreign investors to increase their holdings in the local market since many
financial institutions regulate their portfolios and guard against
over-concentration.