S.Korean bonds rise on c.bank view, bond exchange

* Central bank voices concern about property market

* Investors unswayed by new foreign currency rules for banks (Updates to close)

SEOUL, Nov 19 - South Korean government bonds rallied on Thursday, lifted by the central bank's cautious view on property, expectations of weak monthly data, and a government bond exchange deal.

The Bank of Korea voiced concern in its financial stability report that housing prices would likely rise further, despite recent regulatory measures, as ample liquidity could drive expectations for a further property market boom. [ID:nSEO195803]

A government sale of three-year treasuries worth 834 billion won ($721.3 million) in return for less liquid older-dated notes gave further support for the debt market. [ID:nSEL002764]

Meanwhile, new government regulations on foreign currency liquidity conditions at local banks had a limited influence on debt investors as they contained no direct capital controls on foreign bank branches. [ID:nSEO238632]

"The forex liquidity measures are merely to warn financial companies that the authorities are ready to take capital control action, if needed, to avert a foreign currency crunch," said Chung Sung-min, a fixed-income analyst at Eugene Futures.

The minimum 2 percent holding of A- or higher-rated foreign assets was unlikely to prompt banks to reduce their local bond holdings and buy U.S. Treasuries as most major banks already met the condition, he said.

"Upcoming monthly data will likely suggest that economic recovery momentum has been slowing, an outlook that has driven more debt buying by foreign investors," he said.

The benchmark five-year government bond yield <KRTSY5Y=KQ> fell 6 basis points to 4.78 percent while the three-year yield <KRTSY3Y=KQ> slid 3 basis points to 4.24 percent.

Front-end treasury bond futures <KTBc1> ended up 17 ticks at 109.75.

close prev close 5-yr treasury bonds 4.78 pct 4.84 pct 3-yr treasury bonds 4.24 pct 4.27 pct 1-yr monetary stabilisation bonds 3.19 pct 3.20 pct 3-mth certificates of deposit 2.79 pct 2.79 pct Average call rate 1.97 pct 2.10 pct 6-mth *KORIBOR 3.21 pct 3.21 pct ~ not quoted * Korea interbank offered rate ($1=1156.1 Won)