Americans snap up securities overseas at record pace
LONDON -- Pulled by booming overseas stock markets and pushed by low U.S. interest rates, Americans are gobbling up foreign securities at a record pace.</br></br>This "huge wall of money from American investors" -- in the words of Adaline Ko, a director at Fleming Investment Management Ltd. here -- will continue pouring into overseas markets, money managers and analysts predict.</br></br>But they also warn that a rise in U.S. interest rates, disappointing earnings growth, especially in Europe, and a global shift toward protectionist trade policies could upset stock markets and induce U.S. investors to pull back.</br></br>In the second quarter of this year, U.S. investors purchased a record net $13.2 billion of foreign stocks, according to the Securities Industry Association, or SIA. It marked the 20th consecutive quarter that Americans have added shares to their portfolios in companies such as British drug giant Glaxo Holdings PLC, Mexican telephone concern Telefonos de Mexico SA and NV Royal Dutch Petroleum Co. During that period, U.S. investors have bought $109 billion of foreign stocks, lifting total overseas equity holdings to $210 billion.</br></br>U.S. investors also purchased $27.3 billion of foreign bonds in the first half, surpassing the record $21.9 billion they bought in all of 1990.