Foreign Investors Set Stock Purchase Record

It wasn’t just you and your neighbors caught in the frenzy for “new-economy” stocks in the first quarter of this year.

Data reported Tuesday show that foreign investors bought a record net $62.7 billion of U.S. shares in the first quarter, compared with $107.5 billion worth they bought in all of 1999, according to the Securities Industry Assn.

The unprecedented demand in the first quarter “was a record vote of confidence in the U.S. economy spurred on by the Nasdaq, which went to a record high,” said David Strongin, director of international finance at the SIA.

Of course, given the plunge in Nasdaq and most new-economy shares in April, foreigners’ timing appears to have been miserable. But then, the timing of many U.S. investors wasn’t any better.

Meanwhile, U.S. investors bought $15.8 billion worth of foreign shares in the first quarter, the largest quarterly total since the second quarter of 1996, SIA said.

The first quarter marked the third consecutive quarter of net purchases of foreign securities by U.S. investors. Americans were net liquidators of foreign stocks in 1998 and the first half of 1999, after buying heavily in 1996 and 1997--before the Asian economic crisis began.

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Foreign Cash Pours In

Foreign investors bought a net $62.7 billion of U.S. stocks in the first quarter, a record, the Securities Industry Assn. said Tuesday. Foreign purchases of U.S. shares began to rocket in 1997, helping to drive the U.S. bull market. Annual net purchases or sales and the first-quarter 2000 total, in billions of dollars:

First quarter of 2000: $62.7 billion

Source: Securities Industry Assn.