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Business Title: Global Demand for Long-Term U.S. Assets Rises to Record, Led by Treasuries May 17 (Bloomberg) -- Global demand for long-term U.S. financial assets strengthened in March to a record as investors from China to the U.K. purchased the most Treasuries since November, a Treasury Department report said. Net buying of equities, notes and bonds totaled $140.5 billion in March, more than double economists’ projections, after net buying of $47.1 billion in February, the report released today in Washington showed. Including short-term securities such as stock swaps, investors abroad purchased a net $10.5 billion, compared with net buying of $9.7 billion the previous month. Signs of a sustained economic recovery, including a rebound in earnings and stock prices, may increase demand for U.S. investments as concerns mount about the sustainability of government debt in Europe, economists said. The world’s largest economy has expanded for three consecutive quarters and added 573,000 jobs in the first four months of the year. “Foreign institutions and individuals are still turning to the U.S. as a safe haven,” said Paul Christopher, senior international investment strategist at Wells Fargo Advisors LLC in St. Louis. “There was some concern foreigners were abandoning the U.S. currency. That fear was misplaced.” Economists in a Bloomberg News survey forecast a $50 billion net increase in long-term U.S. financial assets in March, according to the median of seven estimates. China’s Buying China remained the biggest foreign holder of U.S. Treasuries after its holdings rose by $17.7 billion to $895.2 billion in March, the first increase since September in its holdings and biggest jump in percentage terms since July. Japan, the second-largest holder, increased its holdings by $16.4 billion to $784.9 billion in March. Holdings in the U.K. gained $45.5 billion to $279 billion, the fifth straight monthly increase. Total foreign purchases of Treasury notes and bonds were $108.5 billion in March compared with purchases of $48.1 billion in February. Foreign demand for U.S. agency debt from companies such as Fannie Mae and Freddie Mac registered net buying of $22 billion in March, the biggest gain since June 2008. The Standard & Poor’s 500 Index in March rose 5.9 percent, its biggest gain since April 2009, while the Dollar Index, a gauge of the U.S. currency’s strength against six other major currencies, gained 0.9 percent. U.S. Treasuries declined 0.9 percent in March, according to an index compiled by Bank of America Corp.’s Merrill Lynch unit. Stock Purchases Net foreign purchases of equities were $11.2 billion in March after net purchases of $12.9 billion in February. Investors bought a net $16 billion in U.S. corporate debt in March, the first increase since May 2009, after net sales of $12 billion in February. The Treasury’s reporting on long-term securities captures international purchases of government notes and bonds, stocks, corporate debt and securities issued by U.S. agencies such as Fannie Mae and Freddie Mac, which buy home mortgages. Investors may have kept boosting ownership of U.S. financial assets into the second quarter, as fiscal turmoil in Greece led to a 110 billion-euro ($136 billion) bailout earlier this month by the European Union and International Monetary Fund. The euro, which has declined against the dollar in the past five months including a 1.6 percent drop in April, is down about 7 percent this month. “Given the debt crisis that Europe is struggling with, flight to safety will most likely favor the U.S.,” Win Thin, senior currency strategist at Brown Brothers Harriman & Co. in New York, said in a research note today. “Really, would any reserve manager be moving aggressively into euros these past few months?”
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