Within fixed-income circles in Thailand, when people mention the word kimchi they’re not talking about their favourite dish or watering hole in Seoul. They’re talking about the big pool of Korean sovereign and central bank debt that Thai investors have dived into head-first over the past three-and-a-half years.
Kimchi mutual funds, which is the name coined for Thai-based mutual funds focusing on Korea, make up 30% of foreign holdings in Korean central bank and government bonds. According to Korea’s Financial Supervisory Service, the combined Thai holdings were worth W17 trillion $14.5 billion at the end of 2009. The figure quashed the $7.2 billion owned by US investors, which are the second largest holders...
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