Foreign investors increased their holdings of won-dominated bonds in South Korea last month on the back of global economic woes and a sluggish local stock market, financial data showed Thursday.

Offshore investors purchased local bonds worth a net 2.8 trillion won ($2.66 billion) last week, the highest weekly figure in 16 months, according to the data compiled by the Financial Supervisory Service.

They bought 496.8 billion won worth of government bonds and 2.3 trillion won worth of monetary stabilization bonds over the one-week period. Foreign ownership of local bonds reached 99.2 trillion won as of Monday this week, up 2.6 trillion won from a week earlier, said the data.

Experts say that the buying spree has been spurred by a worldwide trend of investors shifting to safer assets on concerns about economic slowdowns in Europe and China.

“South Korea has relatively higher rates than other emerging markets and better market conditions,” said Kim Ji-man, a market analyst from NH Investment & Securities Co. “Foreign ownership of local bonds is expected to rise further despite a possible rate hike in the United States.” (Yonhap)