Foreign net outflows from S.Korea stocks, bonds highest in 13 mths

SEOUL Mon Feb 4, 2013 4:00pm EST

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SEOUL Feb 5 (Reuters) - Foreign outflows from the South Korean stock and bond markets hit a 13-month high in January, data from the markets regulator showed on Tuesday, as the Korean won's recent appreciation triggered profit-taking.

Foreign investors took out a net 2.84 trillion won ($2.59 billion) from the local financial markets last month, the Financial Supervisory Service (FSS) said. The outflow was the , the biggest since December 2011.

Outflow of foreign capital from the stock market stood at 1.93 trillion won during January, as worries that the local currency's recent appreciation would undermine corporate earnings led to profit-taking.

U.S. fund manager Vanguard's decision to switch from the MSCI index to the FTSE to track markets for its emerging market fund also contributed to the outflows, the FSS said.

Foreigners also took out 912 billion won from the bond market last month, marking the first outflow since August as they sought to lock in gains stemming from the won's recent strength.

In the fourth quarter of 2012, the local currency strengthened 3.8 percent against the dollar and 16.5 percent against the yen.

In January, investors from China bought a net 117 billion worth of local bonds, marking the first rise for them in four months. Swiss investors were net buyers of 121 billion won of Korean debt, while Norwegian investors bought a net 56 billion won last month.

An official at the FSS said the Norwegian sovereign wealth fund and the Swiss central bank bought won-denominated bonds during January. He did not disclose the scale of the investments.

($1 = 1097.3000 Korean won) (Reporting by Se Young Lee; Editing by Richard Borsuk)

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