Foreigners scoop up Korean stocks for 6 month in April on chip sector recovery

Foreign investors scooped up Korean stocks in April for the sixth consecutive month on the back of hopes for a recovery in the chipmaking sector, central bank data showed Friday. Offshore investors bought a net US$1.92 billion worth of local stocks last month, following $3.84 billion worth of purchases in March, according to the data from the Bank of Korea (BOK). The central bank said foreigners' net stock purchases came amid the outlook for a rebound in the chipmaking sector despite protracted restrictive monetary stances in major economies. Foreigners bought a net $2.12 billion worth of local bonds last month, following a net selling of $3.39 billion a month earlier, the data showed. Meanwhile, the premium on credit default swaps (CDS) for South Korea's five-year dollar-denominated currency stabilization bonds amounted to 39 basis points in April, up from 34 basis points the previous month. A basis point is 0.01 percentage point. The CDS premium reflects the cost of hedging credit risks on corporate o r sovereign debt. A rise implies a drop in the credit spreads of sovereign bonds and higher borrowing costs. Source: Yonhap News Agency