Report: Foreign stock buying near record
NEW YORK --Foreign investors are likely to buy $150 billion in U.S. stock in 2006, beating every year since 2000, according to a
Purchases of U.S. equities by investors who use banks outside the United States rose in October to $23.6 billion, the same amount they purchased during the entire third quarter, according to the report, by Bank of America strategist Thomas McManus.
Foreign ownership of U.S. stocks amounts to $2.6 trillion, or about 14 percent of the entire market, according to the report.
Strong buying from individuals and institutions who use banks in the United Kingdom, Europe and the Caribbean more than offset selling from investors who bank in Asia. Offshore hedge funds that use Caribbean banks and petrodollar investors using U.K. banks may be driving investment from those regions, according to the report.
Investors using banks in the United Kingdom bought $9.5 billion a month in September and October, according to the report. Buying from investors who use Caribbean banks amounted to a record $8.7 billion in October.
"Foreign investors should continue to expand their ownership of U.S. equities, and we believe that large-cap companies with high quality balance sheets and revenue streams that are well-diversified geographically and along product lines should provide attractive incremental returns as compared to bonds, and a bonus: a built-in hedge against dollar weakness as many of these companies are global," McManus wrote.
