Oil money rushing into Korean stock market

Oil money is rushing into Korean stock exchange. (Photo : NEWSis)

Recently, oil money has been rushing into Korean stock market.

According to Financial Supervisory Service as of 23, foreign investors bought 2.79 trillion won worth Korean stocks. They sold 3.18 trillion won worth stocks for the first quarter, but in the second quarter, they turned into net buyers by purchasing 5.97 trillion won worth stocks.

Middle East led the foreigners’ trend of investment. Straight purchase by Middle East has been increased significantly. This year’s capital from Middle East in Korean stock market is total of 3 trillion won. Particularly, in April, the amount of purchase was 544.5 million won and in May, it was 1.77 trillion won.

This is much more than the amount of purchase (91.2 million won) in May of 2013. Also, this is contrary to trend of European investors who sold 1.13 trillion won worth Korean stocks.

By countries, 1.21 trillion won came to Korean stock market from Arab Emirates ranked second in the amount of purchase in Korean stock market. The first rank is China with 1.66 trillion won. America’s amount of purchase is 981 million won.

The concentration of Middle Eastern capital in Korean stock exchange is because Foreign Investment Authority increase the amount of investment in emerging markets particularly Korea.

According to Korea Trade-Investment Promotion Agency, as of October 2013, the total asset of Abu Dhabi Investment Authority is 627 billion won. It is reported that 15 to 25% of the asset was invested in emerging markets such as Korea.

The asset of Kuwait Investment Authority is about $250 billion. It’s reported that $3 billion from Kuwait was invested in Korea.

Translated by Han Sol Song graduated from Pennsylvania State University – University Park, Advertising/Public Relation