Business · Markets · 1 hr ago
South Korean stock slump threatens household wealth as share holdings hit a record
South Korea’s stock market has fallen sharply, raising concern about losses for households that own shares.
Households held a record 25.8% of financial assets in domestic shares at the end of June, the highest share since records began in 2008.
They held 1,790.7 trillion won in domestic shares and equity stakes, after buying 67.2 trillion won more in the second quarter as the market approached its peak.
Past market slumps cut household financial wealth, with net financial assets falling by as much as 150.9 trillion won during the 2021–22 downturn.
In 2022, falling home and share prices also led household net worth to drop by 168.3 trillion won, the first annual decline in records dating to 2008.
Late-arriving individual investors may bear heavy losses, as they often invest after larger investors and wealthier households.
Those losses could slow household spending, but the sources do not say how large the effect will be or what will happen next.
South Korea’s stock slump threatens household wealth because domestic shares made up a record 25.8% of household financial assets in June.
Households held 1,790.7 trillion won in domestic shares and equity stakes at the end of June.
The KOSPI fell 3.7% on Oct. 20, closing at 5,552.74.
Past market declines have cut household financial assets, with the largest recorded drop reaching 150.9 trillion won in 2022.
An economist warned that losses among individual investors could reduce household wealth and slow consumption.
- Who
- South Korean households, including individual investors, are exposed to losses.
- What
- A stock market slump threatens household wealth as domestic shares account for a record share of household financial assets.
- When
- The KOSPI fell on Oct. 20; household asset figures are for the end of June.
- Where
- South Korea.
- Why
- Households held a record 25.8% of their financial assets in domestic shares and equity stakes, leaving more wealth exposed to a market decline.
This story does not have two clearly opposing sides.
The KOSPI fell 19.3% from April to September, while household net financial assets dropped by 61.6 trillion won in one quarter.
The KOSPI fell 20.9% from January to October, and household holdings of domestic shares declined by 87.6 trillion won from the first to the fourth quarter.
The KOSPI fell 20.2% in the first quarter; household domestic share holdings dropped by 65.9 trillion won.
As the KOSPI fell 34.6% from June 2021 to September 2022, household net financial assets fell by 150.9 trillion won between the first and third quarters of 2022.
Domestic shares and equity stakes made up 25.8% of household financial assets, the highest share since records began in 2008.
The KOSPI fell 3.7% to close at 5,552.74.
- Household domestic shares
- 1,790.7 trillion won at the end of June
- Share of household financial assets
- 25.8% at the end of June, a record since 2008
- Total household financial assets
- 6,930.2 trillion won at the end of June
- KOSPI close
- 5,552.74 on Oct. 20, down 3.7%
- Largest historical quarterly decline in household net financial assets
- 150.9 trillion won in 2022
What people are saying
Many of those who have suffered losses at the peak are likely to be individual investors, and this could lead to a decline in household assets and a slowdown in consumption.