South Korean investor deposits drop by 51 trillion won in four months

Investor deposits in South Korea have decreased by approximately 51 trillion won over the past four months, reaching levels near the yearly low. According to the Korea Financial Investment Association, deposits stood at 88.68 trillion won as of August 22, approaching the minimum level recorded on January 13.

This decline represents a 36.5% drop from the peak of nearly 140 trillion won reached on June 4. While the decrease in liquid cash is significant, analysts suggest much of this capital was not withdrawn from the market but rather deployed into domestic stocks and exchange-traded funds (ETFs). Since early June, individual investors have net purchased over 44 trillion won in the KOSPI market and over 3 trillion won in the KOSDAQ market, alongside massive ETF investments.

Despite this deployment, the shrinking pool of standby cash and declining credit loan balances indicate a weakening appetite for risk among individual investors. Market experts warn that the reduction in available liquidity could increase downward pressure on the stock market, as investors may lack the additional buying power seen during the first half of the year when they were able to offset foreign selling.