Foreigners extend buying of Korean stocks to 5-month high in March on chip sector recovery

Foreign investors scooped up Korean stocks in March for the fifth consecutive month on the back of hopes for a recovery in the chipmaking sector and stock-boosting measures, central bank data showed Thursday. Offshore investors bought a net US$3.84 billion worth of local stocks last month, following $5.59 billion worth of purchases in February, according to the data from the Bank of Korea (BOK). The central bank said foreigners' net stock purchases came amid the outlook for a rebound in the chipmaking sector and measures to boost undervalued stocks despite woes over a delay in restrictive monetary stances in major economies. Foreigners sold a net $3.39 billion worth of local bonds last month, following a net purchase of $2.52 billion a month earlier, the data showed. Meanwhile, the premium on credit default swaps (CDS) for South Korea's five-year dollar-denominated currency stabilization bonds amounted to 34 basis points in March, up from 32 basis points the previous month. A basis point is 0.01 percentag e point. The CDS premium reflects the cost of hedging credit risks on corporate or sovereign debt. A rise implies a drop in the credit spreads of sovereign bonds and higher borrowing costs. Source: Yonhap News Agency