Korean retail investor deposits in brokerage accounts fell to 107.1279 trillion won on July 9, marking the lowest level since February 20 when deposits stood at 104.1291 trillion won, according to the Korea Financial Investment Association. The decline followed eight consecutive trading days of decreases from 132.4697 trillion won recorded on June 29. The drop in investor deposits occurred as the KOSPI index experienced significant volatility after reaching an all-time closing high of 9,114.55 on June 22, subsequently falling to an intraday low of 7,063.76 amid concerns about reduced buying power to absorb foreign selling pressure.
Korean Investor Deposits Fall to Five-Month Low Amid Market Volatility
Investor deposits represent cash held in securities accounts awaiting stock purchases, serving as a measure of market standby funds. The Korea Financial Investment Association reported the deposit balance decreased continuously over eight trading sessions starting June 29. Analysts attribute the decline to retail investors either entering the market for bargain purchases during price drops or withdrawing funds entirely from their accounts.
Yuanta Securities researcher Kim Yong-gu stated that while individual investors continue supporting the market, unlimited expansion of individual net buying capacity cannot be sustained considering the Bank of Korea's interest rate increases, government loan regulations, and declining deposit balances.
Individual Investors Net Purchase 9.37 Trillion Won Against Foreign Selling
During the period from July 1 to July 10, foreign investors net sold 12.3246 trillion won in the main KOSPI market, while individual investors net purchased 9.3669 trillion won, defending the index's lower range. Individual investors shifted to net selling on July 8 with 35.8 billion won in sales, maintaining a selling stance for three consecutive trading days through July 10.
Foreign investors continued net selling from June 19, briefly turning to net buying on July 8-9, before returning to net selling with 322.6 billion won on July 10. Short selling balance through stock lending transactions reached 161.8808 trillion won on July 9, increasing slightly from the previous trading day's 159.3416 trillion won.
Margin Trading Balance Drops to Lowest Since May 26
Margin trading balance, an indicator of debt-financed investment, fell to 36.6336 trillion won on July 9, the lowest level since May 26 when it stood at 36.2548 trillion won. Margin trading balance represents the amount investors borrowed from securities firms for stock investments that remains unpaid, indicating the extent of leveraged positions held by individual investors in the Korean stock market.
Korean Investors Purchase 2.5 Trillion Won in 3x Leveraged ETFs
Korean investors demonstrated aggressive positioning in overseas markets during the week of July 3-9, according to the Korea Securities Depository's Seibro portal. The top net purchase by settlement amount was the DIREXION DAILY SEMICONDUCTORS BULL 3X SHS ETF, which tracks the Philadelphia Semiconductor Index with 3x leverage, recording 1.5538 billion USD (approximately 2.3363 trillion won) in net settlement.
The DIREXION SHARES ETF TRUST DAILY MSCI SOUTH KOREA BULL, tracking Korean stock market performance with 3x leverage, ranked second with 138.91 million USD (approximately 208.8 billion won) in net settlement. Combined net purchase settlement amounts for these two leveraged products exceeded 2.5 trillion won in Korean currency.
FAQ
What happened to Korean investor deposits on July 9?
Korean investor deposits in brokerage accounts fell to 107.1279 trillion won on July 9, the lowest level since February 20 when deposits stood at 104.1291 trillion won, following eight consecutive trading days of declines from 132.4697 trillion won on June 29.
How much did individual investors net purchase in Korean stocks from July 1-10?
Individual investors net purchased 9.3669 trillion won in the KOSPI market from July 1 to July 10, while foreign investors net sold 12.3246 trillion won during the same period.
