S.Korea's individual investors buy bonds this year worth $5.3 billion
Hyun-Ju Jang
Mar 16, 2023 (Gmt+09:00)
Individual investors in South Korea this year have made net bond purchases, or the difference between the buying and selling amounts, worth over 7 trillion won ($5.3 billion), apparently preferring bonds with higher interest rates and stability over bank deposits.
The Korea Financial Investment Association on Wednesday said such investors this year have made net bond purchases worth 7.1 trillion won on the over-the-counter market, up over 600% from 1.7 trillion won in the same period last year.
Bond experts said investment is trending toward hybrid securities and subordinated bonds, two major investment instruments for individuals. On Tuesday, ABL Life Insurance, which has an "A" rating, issued subordinated bonds worth 130 billion won, 50 billion won more than originally planned. In attracting additional demand, the insurer issued a higher amount as purchase orders from individual investors poured in thanks to high annual interest of 6.6%.
Demand is steady even on the market for A-grade corporate bonds. Hyundai Doosan Infracore Co., a construction equipment affiliate of HD Hyundai Co., doubled its bond issuance amount to 100 billion won amid surging retail demand after opening on March 7 its demand forecast for corporate bonds of 50 billion won.