South Korea Prepares for Global Bond Market Spotlight

As South Korea gears up for its inclusion in the World Government Bond Index (WGBI) this November, the government is fine-tuning its strategy to attract global investors. The Ministry of Economy and Finance (MOEF) is set to host an investment briefing in early February, aiming to showcase the allure of South Korean government bonds to a global audience, including commercial banks, sovereign wealth funds, pension funds, and central banks.

This year's briefing will adopt a unique promotional approach, reflecting the significance of South Korea's upcoming WGBI inclusion. The government also plans to extend its promotional efforts to key markets such as China, Japan, Australia, and Western Europe, targeting institutional investors who have shown increasing interest in South Korean government bonds.

WGBI Inclusion: A Gateway to Global Investment

Following its successful inclusion in the WGBI last October, South Korean government bonds are poised to make a significant impact on the global stage. With an estimated 75 trillion won ($51.55 billion) in foreign investment expected to flow in, South Korea's bonds will account for approximately 2.22 percent of the index, ranking ninth among 26 member countries.

Goldman Sachs predicts that WGBI inclusion will not only attract $50 to 60 billion in passive fund inflows but also around $10 billion in active fund investments. A MOEF representative highlighted the strategic timing of these investments, stating, "Passive funds will flow in starting November, while active funds are expected to enter approximately six months earlier. Leveraging WGBI inclusion, we aim to actively promote government bond investments and encourage early inflow of active funds."