EU Fund Outflow From S. Korea Records US$ 18.2 In 2011

European fund outflow from South Korea reached 18.2 billion U.S. dollars last year as debt problems in the euro area encouraged European investors to withdraw their money from the country, a report by the central bank showed Tuesday.

Outstanding European investments into South Korea’s bonds and stocks came in at 132.4 billion dollars as of the end of 2011, down 18.2 billion dollars from a year earlier, according to the Bank of Korea (BOK).
The European fund outflow mainly contributed to last year’s net outflow of 10.9 billion dollars in foreign fund from the South Korean financial market, according to the report.

The European investors were estimated to withdraw their money from the country as the region’s fiscal crisis caused lack of confidence in the region’s banking system, and in consequence brought about lack of liquidity in the financial institutions.

Despite the outflow in the financial market, the European Union (EU) accounted for 28.1% of all foreign investments into South Korea in 2011, followed by the United States with 27.5%, Southeast Asian nations with 18.4% and Japan with 8.8% respectively.

The U.S. investors ranked first in terms of stock investments with its holdings taking up 43.5% of all foreign investments, while Southeast Asian investors were the largest holders of local bonds with its holdings reaching 28% of the total. As of the end of 2011, inbound investments into the country reached 839.2 billion dollars, up 7.8 billion dollars from the previous year, according to BOK. The growth was sharply down from a 100.6 billion dollar expansion in 2010 and a 182.9 billion dollar surge in 2009 each, Xinhua reported.