Business · Markets · 2 hrs ago
South Korean investors' stock-market cash falls by more than 51 trillion won
Cash waiting to buy South Korean stocks fell to 88.7 trillion won by Oct.
22, its lowest level since Jan.
13.
The money, held in brokerage accounts but not yet invested, had reached a record 139.7 trillion won on June 4, then dropped by more than 51 trillion won in about four months.
A steep market decline has weakened retail investors' confidence: the KOSPI fell from around 7,000 to around 5,500 this month.
With less cash on hand, individual investors may have less ability to buy shares during the slump, making it harder for the market to absorb continued selling by foreign investors.
Investors are also reducing stock purchases made with borrowed money; outstanding credit-financed stock purchases fell by more than 3 trillion won from the start of the month to Oct.
21.
Analysts say some individual investors are moving money from South Korean stocks to US markets, while the cash decline suggests that domestic investors' enthusiasm has cooled.
The reports describe a pullback, but give no forecast or next policy step.
South Korean retail investors are pulling back as a steep market slump weakens confidence and reduces their capacity to buy shares.
Investor deposits fell to 88.6841 trillion won on Oct. 22, their lowest level since Jan. 13.
The deposits had reached a record 139.6948 trillion won on June 4, then declined as markets corrected.
This month, investor deposits fell by about 15 trillion won, while margin-loan balances dropped by more than 3 trillion won.
Analysts said some individual investors are shifting money from South Korea to the United States.
- Who
- South Korean individual investors.
- What
- They are reducing their exposure to domestic shares, and funds awaiting investment have fallen sharply.
- When
- The pullback has intensified this month; deposits were at 88.6841 trillion won on Oct. 22.
- Where
- South Korea’s stock market.
- Why
- The market slump has weakened investor confidence and reduced available buying funds. Analysts also cited money moving to U.S. markets.
This story does not have two clearly opposing sides.
Investor deposits reached a record 139.6948 trillion won.
Investor deposits fell below 100 trillion won.
Deposits dropped below 90 trillion won, and margin-loan balances stood at 30.271 trillion won.
Investor deposits fell to 88.6841 trillion won, their lowest level since Jan. 13.
The KOSPI opened at 5,403.17, down 130.60 points, or 2.36%, from the previous trading day.
- Investor deposits on Oct. 22
- 88.6841 trillion won
- Record investor deposits
- 139.6948 trillion won on June 4
- Deposit decline this month
- About 15 trillion won
- Margin-loan balances
- Fell from 33.3901 trillion won early in the month to 30.271 trillion won on Oct. 21
- SK Hynix margin loans
- Fell by about 650 billion won over seven trading days from Oct. 13
What people are saying
The customer deposits that serve as funds waiting to buy stocks are coming in much more slowly than the KOSPI’s trend would suggest.
Since July, individual investors’ money has been moving from South Korea to the United States.
When stocks fell before, I thought I could pick companies with decent earnings, hold on, or average down, but none of that common sense works now.
When prices rise and fall by several percent in a day and sidecars keep being triggered, I have no idea where the bottom is.