Investors’ Deposits About to Exceed 50 Tril. Won

With KOSPI rapidly ascending and descending after having regained 2,000 points, investors’ deposit hit an all-time high of close to 50 trillion won and their stock purchase based on money borrowed from securities companies topped 12 trillion won for the first time ever.The Korea Financial Investment Association announced on June 16 that the deposit totaled 48,206.8 billion won on June 15. It topped 40 trillion won for the first time this year on March 24 and has continued to increase since then.

According to market experts, this has to do with low interest rates that have led to more market liquidity and tightening government regulations in the real estate market. The deposit totaled approximately 27 trillion won at the end of last year and topped 30 trillion won in January this year.

Another reason is the ongoing change in industrial dynamics that has been triggered by COVID-19. “In the 2010s, the South Korean market moved sideways whereas the U.S. stock market continued to move up, during which the prices of major stocks such as shipbuilding, construction, steel and automobile fell,” HI Investment & Securities explained, adding, “At present, semiconductor, secondary battery, platform industry and biotech stocks are emerging after the outbreak COVID-19 and more and more investors are revaluing companies in the industries.”

The investment based on borrowed money, in the meantime, continued to increase for 54 trading days and added up to 12,059.8 billion won on June 15. It is the largest since June 20, 2018, when it totaled 12,272.5 billion won, and increased by more than 80 percent in two and a half months.