Securities Industry Association: U.S. Foreign Equity Holdings Soar, Foreign Net Purchases Of U.S. Securities Expected To Total $1 Trillion For ‘04

Americans continued to add a foreign flavor to their stock portfolios in the second quarter of 2004. The $24.6 billion in acquisitions of foreign stocks, added to the first quarter’s $18.6 billion, put U.S. foreign equity holdings on track to surpass 2003’s total of $71 billion.

Securities Industry Association Vice President David Strongin, writing in the latest edition of Foreign Activity Report, cites the 32-percent gain in the Japanese stock market since the beginning of 2002 as a main reason for investors’ interest in foreign stocks in general, and stocks of Japanese companies in particular.

Foreigners also continued their interest in U.S. bonds in the second quarter. While the amount of foreign net purchases of U.S. securities dropped from the first quarter’s $268.4 billion to $230 billion, (virtually all in U.S. bonds), Strongin is still predicting a year-end total of $1 trillion.

To order a copy of the report go to http://www.sia.com/research/html/foreign_activity_report.html