"Absorbing Every Foreign Sell-Off to 'Protect Stock Prices'... Korean Retail Investors Running Out of Ammo"

Investor Deposits Fall Below 120 Trillion Won
Lowest Level Since Mid-April

The amount of investor deposits, which serves as standby funds in the stock market, has fallen below 120 trillion won for the first time in about three months.

According to the Korea Financial Investment Association on July 4, investor deposits stood at 119.9264 trillion won as of July 2. This marks a decrease for three consecutive days. In addition, this is the first time investor deposits have dropped below 120 trillion won in two and a half months, since April 16 (119.0742 trillion won). Compared to the record high of 139.6947 trillion won on June 4, the amount has decreased by approximately 20 trillion won in just one month.

Investor deposits refer to the 'standby funds' that investors have deposited into their securities accounts for stock purchases, but have not yet used, remaining in cash. Generally, an increase in deposits is interpreted as an improvement in investor sentiment. Typically, deposits increase during public offering subscription booms or when stock prices are rising, and rapidly flow out during market downturns. Recently, as foreign investors continued to sell in the KOSPI market and individual investors absorbed these sales, the decrease in investor deposits is believed to be due to large-scale stock purchases by individuals.

Between June 3 and July 2, foreign investors sold 55.0594 trillion won worth of domestic stocks, while individual investors made net purchases of 55.2535 trillion won. However, since investor deposits are considered the 'ammo' for individuals in the stock market, concerns have been raised that individuals' buying power may be declining. The current figure is still much higher than the 87.829 trillion won at the end of last year. However, since the recent upward trend has halted and more than 12 trillion won has been withdrawn over the past three trading days, a downward trend is apparent.

Some analysts, however, suggest that the recent sharp market drop may have led to bargain hunting, and that it would be unreasonable to judge that buying power in the market has diminished solely based on the decrease in investor deposits.

Meanwhile, the KOSPI index resumed its rally, which had been halted during the war, following the ceasefire agreement between the United States and Iran in April. As a result, investor deposits surged and hit an all-time high of 139.6948 trillion won on June 4.

After closing at a record high of 9,114.55 on June 22, the KOSPI plunged 9.99% the next day. Although it rebounded for two consecutive days, reaching 8,930.30 on June 25, it then fell by 14.36% over the next five trading days, closing at 7,648.09 on July 2.

This content was produced with the assistance of AI translation services.