South korea: South Korean institutions' investment in foreign securities experienced a decline for the first time in five quarters during the three months ending in March. This downturn was influenced by weak overseas stock markets caused by the ongoing conflict in the Middle East, as revealed by central bank data.

According to Yonhap News Agency, the outstanding value of foreign securities held by local institutional investors stood at US$503.33 billion at the end of March. This represents a decrease of $4.26 billion compared to three months earlier, based on data from the Bank of Korea (BOK). This marked the first quarter-on-quarter decline since the fourth quarter of 2024, when the balance fell by $6.75 billion.

Foreign securities encompass stocks, bonds, and "Korean paper," which refers to foreign currency-denominated securities issued by the South Korean government, banks, or companies in overseas markets. By type, the investment of local institutions in foreign stocks saw a decline of $4.01 billion on-quarter, while the value of their foreign bond holdings decreased by $450 million during the same period.

The BOK noted that a stock market correction, triggered by the war in the Middle East, led to losses from foreign stock investments, which outweighed any increased net investment driven by bargain hunting.