China's Rising Sway Seen in Korea Bonds as Holdings Top U.S. (1)
by
Bloomberg News
In a sign of China’s increasing presence in Asia’s No. 4 economy, its companies are buying up South Korean...
In a sign of China’s increasing presence in Asia’s No. 4 economy, its companies are buying up South Korean counterparts at a record pace and the country has now surpassed the U.S. as the biggest foreign holder of won-denominated bonds.
China has been a steady buyer of South Korean sovereign debt in the past several years as officials sought to diversify investments in foreign-Exchange reserves. China’s Korean holdings rose to 17.5 trillion won ($15 billion) last month, accounting for almost one-fifth of bonds owned by foreigners. Chinese companies’ investment in South Korean firms rose to a record high last year as China seeks a transition to an economy led by services and domestic demand.
China’s spending spree is seen as a double-edged sword in South Korea. While the inflow of investment reflects confidence, a weakening Chinese economy could heighten Volatility in Korean markets. In the face of a surge of money into Korean assets earlier this decade, policy makers introduced measures including limits on currency forwards. The government said this month it is reviewing the measures to reflect changes in financial markets.
The two economies already are closely tied, with China accounting for one quarter of South Korea’s exports as its largest trading partner. And the appetite for Korean assets is sounding alarm bells among domestic companies at a time when China is only a few years behind in key industries.
“Chinese money in Korean markets is positive in terms of investor diversification, but could lead to capital outflow in cases of economic turmoil in China,” said Lee Chang Seon, a research fellow for LG Economic Research Institute in Seoul. “Korea’s real economy is already largely dependent on China, and now China’s impact on financial markets is also rising.”
South Korea’s won -- sometimes viewed as a proxy for the yuan for global investors -- has seesawed this year with concerns about instability in China’s economy. The won outperformed all regional peers in March as Chinese policy makers said there was no need to devalue the yuan, after plunging 5 percent in the first two months of 2016.
Pushing Past U.S.
China moved past the U.S. to become the top holder of South Korean debt last month as U.S. funds withdrew 3.7 trillion won while Chinese firms added 74 billion won, data from the Financial Supervisory Service show. Chinese holdings in Korean stocks are relatively small compared with debt holdings. Chinese funds held 8.4 trillion won in local equities at the end of February, as the 11th-largest foreign investor in Korean stocks. The U.S. was the biggest with 161.7 trillion won in local equities.
Korea is seeing foreigners return to its financial markets this month after outflows in February. Overseas funds bought $1.1 billion more of domestic bonds and $3 billion more of equities than they sold so far this month, according to data compiled by Bloomberg.
Chinese investment in Korean companies rose to a record $2.5 billion in 2015, data compiled by Bloomberg show. China accounted for 10 of 32 acquisitions by foreign firms last year, followed by seven from the European Union and six from the U.S., a statement by South Korea’s Fair Trade Commission showed.
Services, Entertainment
China’s interest in Korean companies is shifting from acquisitions in the manufacturing industry including semiconductor and computer companies to the services sector -- especially entertainment and culture, according to South Korea’s Institute for International Trade. The change is accompanying the Chinese government’s efforts to support domestic demand and cultural assets.
Major deals in 2015 included Anbang Insurance Group buying shares of Korea’s Tongyang Life Insurance for 1.13 trillion won and Jumei International Holding purchasing a stake in Korean cosmetics maker It’s Skin Co. for $125 million. China’s DMG Entertainment and Media also bought a stake in Korea’s Chorokbaem Media, the maker of “The Producers” drama starring film star Kim Soo Hyun.
“Chinese companies are using merger and acquisitions as a major tool for developing technology and increasing market share,” Lee Eun Mi, a researcher at the Institute for International Trade, wrote in a March 14 report. “With China’s M&A spreading to all industries, there are concerns that Korean companies losing competitiveness could apply to services as well as major manufacturing sectors.”
(Updates with capital flow data in eighth paragraph.)
--With assistance from James Mayger To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net. To contact the editors responsible for this story: Brett Miller at bmiller30@bloomberg.net, Jodi Schneider
In a sign of China’s increasing presence in Asia’s No. 4 economy, its companies are buying up South Korean counterparts at a record pace and the country has now surpassed the U.S. as the biggest foreign holder of won-denominated bonds.
China has been a steady buyer of South Korean sovereign debt in the past several years as officials sought to diversify investments in foreign-Exchange reserves. China’s Korean holdings rose to 17.5 trillion won ($15 billion) last month, accounting for almost one-fifth of bonds owned by foreigners. Chinese companies’ investment in South Korean firms rose to a record high last year as China seeks a transition to an economy led by services and domestic demand.
China’s spending spree is seen as a double-edged sword in South Korea. While the inflow of investment reflects confidence, a weakening Chinese economy could heighten Volatility in Korean markets. In the face of a surge of money into Korean assets earlier this decade, policy makers introduced measures including limits on currency forwards. The government said this month it is reviewing the measures to reflect changes in financial markets.
The two economies already are closely tied, with China accounting for one quarter of South Korea’s exports as its largest trading partner. And the appetite for Korean assets is sounding alarm bells among domestic companies at a time when China is only a few years behind in key industries.
“Chinese money in Korean markets is positive in terms of investor diversification, but could lead to capital outflow in cases of economic turmoil in China,” said Lee Chang Seon, a research fellow for LG Economic Research Institute in Seoul. “Korea’s real economy is already largely dependent on China, and now China’s impact on financial markets is also rising.”
South Korea’s won -- sometimes viewed as a proxy for the yuan for global investors -- has seesawed this year with concerns about instability in China’s economy. The won outperformed all regional peers in March as Chinese policy makers said there was no need to devalue the yuan, after plunging 5 percent in the first two months of 2016.
Pushing Past U.S.
China moved past the U.S. to become the top holder of South Korean debt last month as U.S. funds withdrew 3.7 trillion won while Chinese firms added 74 billion won, data from the Financial Supervisory Service show. Chinese holdings in Korean stocks are relatively small compared with debt holdings. Chinese funds held 8.4 trillion won in local equities at the end of February, as the 11th-largest foreign investor in Korean stocks. The U.S. was the biggest with 161.7 trillion won in local equities.
Korea is seeing foreigners return to its financial markets this month after outflows in February. Overseas funds bought $1.1 billion more of domestic bonds and $3 billion more of equities than they sold so far this month, according to data compiled by Bloomberg.
Chinese investment in Korean companies rose to a record $2.5 billion in 2015, data compiled by Bloomberg show. China accounted for 10 of 32 acquisitions by foreign firms last year, followed by seven from the European Union and six from the U.S., a statement by South Korea’s Fair Trade Commission showed.
Services, Entertainment
China’s interest in Korean companies is shifting from acquisitions in the manufacturing industry including semiconductor and computer companies to the services sector -- especially entertainment and culture, according to South Korea’s Institute for International Trade. The change is accompanying the Chinese government’s efforts to support domestic demand and cultural assets.
Major deals in 2015 included Anbang Insurance Group buying shares of Korea’s Tongyang Life Insurance for 1.13 trillion won and Jumei International Holding purchasing a stake in Korean cosmetics maker It’s Skin Co. for $125 million. China’s DMG Entertainment and Media also bought a stake in Korea’s Chorokbaem Media, the maker of “The Producers” drama starring film star Kim Soo Hyun.
“Chinese companies are using merger and acquisitions as a major tool for developing technology and increasing market share,” Lee Eun Mi, a researcher at the Institute for International Trade, wrote in a March 14 report. “With China’s M&A spreading to all industries, there are concerns that Korean companies losing competitiveness could apply to services as well as major manufacturing sectors.”
(Updates with capital flow data in eighth paragraph.)
--With assistance from James Mayger To contact the reporter on this story: Jiyeun Lee in Seoul at jlee1029@bloomberg.net. To contact the editors responsible for this story: Brett Miller at bmiller30@bloomberg.net, Jodi Schneider
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔