EVEN as a backlash grows in the United States against overseas - especially, Japanese - ownership of American companies, US investors are buying historic amounts of foreign stocks.
US net purchases of overseas equities rose to a record $25 billion in the first three quarters of 1991, according to the Securities Industry Association (SIA), a trade group. That amount is almost double the prior peak of overseas stock purchases by Americans, $13 billion recorded during the entire year of 1989.
US investors have made net purchases of foreign stocks for 13 consecutive months through September, 1991, the last month for which statistics are complete. American investors owned about $125 billion worth of overseas equities by September of last year, according to David Strongin, an official of the SIA.
Much of the interest in overseas stocks is linked to a return of smaller investors to the market, experts say. Declines in some overseas markets in past months also mean that many overseas stocks are currently trading at prices well below their highs.
Much of the better performance among overseas stock markets is taking place in smaller markets. Last year, for example, the two hottest-performing markets were Hong Kong, which rose 43 percent in US dollar terms, and Australia, which rose 29 percent. Wall Street, that is, the US stock market, was third, rising 27 percent. Markets such as Japan and Germany failed to place in the top 10 last year in returns, coming in 15th and 16th respectively, according to Thieme Associates Inc.
So far this year, smaller markets, especially in Asia, continue to post gains. Ten of the 20 markets covered by Morgan Stanley & Co. were up in January, 1992. Finland was first, although it was a market underperformer last year; Hong Kong was second; Austria third. Prominent markets such as Britain, Australia, the US, and Japan, all came in below the top 10 performing markets in January.