A new measure could provide earlier insights into portfolio flows to Korea

A proprietary measure of daily same-day gross bond flows has been developed by Standard Chartered that provides earlier insight into portfolio flows to Korea than data from the Korean Financial Supervisory Service (FSS), according to its research report released on Friday.

The FSS data is available at the end of each day and covers Korean Treasury Bonds (KTBs), Monetary Stability Bonds (MSBs) issued by the Bank of Korea, and corporate and municipal bonds. Since the daily and monthly data match up, the daily data are used to avoid a one-month lag. 

Comparing the new measure with the current data shows little difference between the underlying dynamics of the two daily series, but potentially an earlier indication of flows from the new measure, which picked up substantial inflows after the 28 March FOMC meeting earlier than the FSS data did. 

"These new measure is said to only capture KTB and MSB flows, but these are the dominant flows," added the Bank.