UAE snaps up Korean stocks in November

UAE snaps up Korean stocks in November. January. 04, 2018 08:51. by Choong-Hyun Song balgun@donga.com.

The United Arab Emirates (UAE) made its largest-ever investment in the Korean stock market last November, with its sovereign wealth funds buying stocks of Korea's top-100 corporations in terms of market capitalization.

According to the Financial Supervisory Service on Wednesday, the UAE held stocks of companies listed on the Korean stock market worth nearly 9.5 trillion won (8.9 billion U.S. dollars) as of the end of November 2017, up 7.8 percent from the previous month, the biggest increase last year. The Middle Eastern country purchased a net 967 billion won (906.3 million dollars) in the Korean securities market to become the largest net buyer of Korean stocks. The amount was greater than the 856 billion won (802.2 billion dollars) invested by the United States, usually the largest buyer of Korean stocks. The UAE also bought stocks worth a net 21 billion won (19.7 million dollars) in the tech-heavy Kosdaq market.

Between June and October 2017, the UAE were a net seller in the local stock market. The UAE's November net purchase was about eight times greater than its pre-November net purchase peak totaling 119 billion won (111.6 million dollars) in March.

According to the financial watchdog, most of the UAE investors are financial institutions, meaning that it was the Middle Eastern country's decision to increase its Korean stock purchases. While the UAE's stock investment was concentrated on oil-related companies in the past, the investment was made in November in about 100 major companies including Samsung Electronics Co., SK Hynix and Hyundai Motor Co.

Some analysts speculate that some senior South Korean officials' visits to the UAE led to Abu Dhabi's increased investment in Korean stocks. In early November, Defense Minister Song Young-moo visited the UAE to cheer up the South Korean troops deployed in the Middle Eastern country, followed by a visit by Yim Jong-seok, chief of staff of President Moon Jae-in as a special envoy, in December.