South Korea retail investors keep buying as investor deposits fall sharply

Foreign investors have sold roughly 191 trillion won of Korean equities this year, while domestic retail investors have net‑bought about 145 trillion won, offsetting much of the foreign sell‑off. Investor‑deposit balances, the cash pool that can be used for stock purchases, dropped 21.4 % from a record 139.7 trillion won on June 4 to 109.9 trillion won by mid‑July, a decline of more than 28 trillion won.

Analysts note that the deposit fall largely reflects cash being spent on buying stocks and exchange‑traded funds, not a withdrawal of funds. Retail investors purchased 27 trillion won of individual shares and 8.8 trillion won of ETFs after the KOSPI hit a new high on June 22, exceeding the amount of the deposit drop. While the market’s buying support remains, experts caution that leverage‑fund flows, which are sensitive to external financing conditions, could affect future retail buying capacity.