Stock Market Volatility Calms... 'Bitt' Falls Below 20 Trillion Won Again

Transaction Amount and Investor Deposits Both Show Slowing Growth Trends

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] The scale of 'debt investment'?buying stocks on borrowed money?has fallen below 20 trillion won. Trading volume and investor deposit funds, which serve as market liquidity, also appear to have slowed compared to the previous month. As stock market volatility eases, the investment enthusiasm seems to have somewhat calmed down.

According to the Korea Financial Investment Association on the 6th, as of the 2nd, the balance of credit transaction loans stood at 19.99 trillion won. This marks the first time since the 6th of last month that it dropped to the 19 trillion won level. After reaching an all-time high of 21.633 trillion won on the 25th of last month, it has declined for six consecutive trading days. This is the longest continuous decline since September 21-29 of last year. Although it recovered to 20.263 trillion won as of the 4th, compared to the steady 21 trillion won level recorded since mid-last month, it represents a decrease of about 1 trillion won.

Trading volume also decreased. As of the 2nd, the KOSPI market trading volume was recorded at 19.1439 trillion won. This is the first time this year it has fallen below 20 trillion won. It is less than half of the all-time high of 44.4338 trillion won recorded on the 11th of last month. It slightly recovered to 22.4278 trillion won on the 3rd but dropped again to 19.7898 trillion won on the 5th.

Investor deposit funds also show signs of slowing. As of the 4th, they were recorded at 66.007 trillion won. After reaching an all-time high of 74.456 trillion won on the 12th of last month, the amount fluctuated between 68 trillion and 70 trillion won but has recently been on a downward trend. Compared to 68.287 trillion won on the first trading day of this year, the 4th of last month, it has decreased by more than 2 trillion won.

The reduction in stock market volatility is interpreted as a sign that investment enthusiasm has somewhat calmed. On the 25th of last month, the KOSPI closed at 3208.99, surpassing the 3200 mark for the first time ever on a closing basis. Following this, a correction began, and by the 29th of the same month, it had dropped to 2976.21. This was attributed to the global spread of uncertainty triggered by an incident where individual investors collectively bought 'GameStop' stocks in protest against short selling, causing a sharp rise in stock prices and significant losses for hedge funds. After the situation settled, the stock market began to calm down somewhat. The domestic market also rebounded slightly, recovering the 3000 mark and then moving sideways without major fluctuations.

Researcher Jaeseon Lee of Hana Financial Investment explained, "The Skew Index, which gauges extreme stock price drop predictions, decreased by 10 points from the end of January to 136. Although it is still higher than the historical average, the KOSPI Volatility Index (VKOSPI) also fell from 35 to 32, indicating a slight easing of volatility."

With the somewhat calmer atmosphere, securities firms have also started to resume margin buying. They have restarted loan services that temporarily limited credit provision limits until recovery. Korea Investment & Securities and NH Investment & Securities resumed new credit loan purchases and securities collateral loan services from the 3rd. Daishin Securities also lifted the ban on new margin purchases.

Researcher Yujun Choi of Shinhan Financial Investment advised, "Next week is expected to see relatively quiet trading ahead of the Lunar New Year holiday. It is necessary to pay attention to short-term volatility due to the options expiration on the 10th."

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