ID :
92102
Sun, 11/29/2009 - 15:24
Auther :
Shortlink :
https://www.oananews.org//node/92102
The shortlink copeid
S. Korea posts record capital account surplus
SEOUL, Nov. 29 (Yonhap) -- South Korea has posted a sharp capital account surplus
so far this year as foreigners have expanded investment in the local stock and
debt markets, encouraged by stabilized financial sentiment, the central bank said
Sunday.
But a recent debt moratorium request by a Dubai government investment fund is
raising fears that such massive net capital inflows into the nation's financial
market could leave it more vulnerable to outside shocks and a massive withdrawal
of foreign money.
According to the data provided by the Bank of Korea (BOK), the capital account
surplus totaled US$24.9 billion in the January-October period, a sharp turnaround
from a deficit of $33.9 billion during the same period a year ago.
The amount is the largest ever posted during the 10-month period since the
central bank started to announce related data in 1980.
The increase is attributed mostly to eased investor jitters, which encouraged
foreigners to pick up Korean shares and bonds after being spooked by the
financial turmoil caused by the collapse of Lehman Brothers last year.
Foreign investment in the local bourse came to a surplus of $22.7 billion until
October compared with a deficit of $39.9 billion during the same period last
year, the BOK said. Net capital flows into the local debt markets also grew by
more than two-fold over the same period.
The turnaround in the capital account reflects improved market sentiment, but
some experts worry that it could leave the nation's financial markets more
vulnerable to outside fluctuations.
Jitters have intensified Dubai World called for a six-month moratorium on
repayment of its debts last week, sending shockwaves through global financial
markets. South Korea's stock markets also plunged and the local currency lost
ground against the U.S. dollar.
"The capital account turned positive thanks to massive purchasing of Korean
shares and bonds by foreign investors ... If they pull out their money in droves,
it could cause a market panic," a BOK official said.
The government was quick to assuage such concerns, saying that the impact from
the Dubai debt problem would be marginal, but added it is watching local
financial markets closely for signs of a possible fallout from the shock from the
Middle East.
kokobj@yna.co.kr
(END)
so far this year as foreigners have expanded investment in the local stock and
debt markets, encouraged by stabilized financial sentiment, the central bank said
Sunday.
But a recent debt moratorium request by a Dubai government investment fund is
raising fears that such massive net capital inflows into the nation's financial
market could leave it more vulnerable to outside shocks and a massive withdrawal
of foreign money.
According to the data provided by the Bank of Korea (BOK), the capital account
surplus totaled US$24.9 billion in the January-October period, a sharp turnaround
from a deficit of $33.9 billion during the same period a year ago.
The amount is the largest ever posted during the 10-month period since the
central bank started to announce related data in 1980.
The increase is attributed mostly to eased investor jitters, which encouraged
foreigners to pick up Korean shares and bonds after being spooked by the
financial turmoil caused by the collapse of Lehman Brothers last year.
Foreign investment in the local bourse came to a surplus of $22.7 billion until
October compared with a deficit of $39.9 billion during the same period last
year, the BOK said. Net capital flows into the local debt markets also grew by
more than two-fold over the same period.
The turnaround in the capital account reflects improved market sentiment, but
some experts worry that it could leave the nation's financial markets more
vulnerable to outside fluctuations.
Jitters have intensified Dubai World called for a six-month moratorium on
repayment of its debts last week, sending shockwaves through global financial
markets. South Korea's stock markets also plunged and the local currency lost
ground against the U.S. dollar.
"The capital account turned positive thanks to massive purchasing of Korean
shares and bonds by foreign investors ... If they pull out their money in droves,
it could cause a market panic," a BOK official said.
The government was quick to assuage such concerns, saying that the impact from
the Dubai debt problem would be marginal, but added it is watching local
financial markets closely for signs of a possible fallout from the shock from the
Middle East.
kokobj@yna.co.kr
(END)
