Frustrated Parkspi... Investors Moving to Overseas Stock Markets

Overseas Stock Custody Balance Exceeds 112 Trillion
Massive Net Purchases of Leverage Products This Month

Seeking More Than Triple the Nasdaq 100 Index Returns
'ProShare UltraPro QQQ ETF' Net Bought 156.4 Billion Won

[Asia Economy Reporter Minji Lee] "I'm leaving the domestic stock market. It's frustrating that I can't rise when others do, and I fall even more when the market drops."

As the KOSPI remains stuck in a box range around the 3000 level, investors are increasingly flocking to overseas markets.

According to the Securities Information System SaveRo on the 31st, the foreign currency custody balance, which combines overseas stock purchase amounts and foreign currency deposits, reached 112.9456 trillion KRW from the 1st to the 28th of this month, setting a new monthly record high for the year. The custody balance, which had decreased from 107.2791 trillion KRW in August to 105.3266 trillion KRW last month, surpassed 112 trillion KRW this month. Compared to a year ago (72 trillion KRW in October last year), it has grown by about 55%.

Over the past month, while the U.S. stock market has continued its upward trend, the domestic market has shown sluggish performance, reflecting an increase in investors turning to overseas investments. The Nasdaq index has risen about 8.73% over the past month, reaching an all-time high this month. Ji-young Han, a researcher at Kiwoom Securities, explained, "Expectations for the earnings season continue due to strong performances from major companies such as Ford and Merck."

In contrast, the KOSPI fell 3.20%, maintaining a stagnant trend near the 3000 level. During this period, the trading volume of individual investors in the KOSPI market was 2.9135 trillion KRW, significantly lower compared to 6.9897 trillion KRW two months ago. Compared to 25.8705 trillion KRW in January this year, it has decreased by over 90%.

Meanwhile, overseas stock direct purchase investors have heavily bought leveraged ETFs (Exchange-Traded Funds) that seek returns exceeding the rise of the underlying indices since the beginning of this month. Among the top 10 net purchase items by domestic investors were the 'ProShares UltraPro QQQ ETF' (1.564 billion KRW), which tracks the Nasdaq 100 index three times, the 'SOXL (DIREXION DAILY SEMICONDUCTORS BULL 3X SHS) ETF' (839 million KRW), which seeks triple returns of semiconductor companies, and the 'ProShares Ultra QQQ ETF' (480 million KRW), which aims for double the returns of the Nasdaq 100 index. Additionally, the 'BANK OF MONTREAL MICROSECTORS FANG INNOVATION 3X LEVERAGED ETN' (369 million KRW), which gathers U.S. tech stocks, and 'LABU (DIREXION DAILY S&P BIOTECH BULL 3X SHS ETF)', which tracks S&P biotech companies at over three times, were also purchased for 276 million KRW.

Among individual stocks, semiconductor equipment company ASML was the most purchased, with 2.218 billion KRW. ASML's closing price earlier this month fell about 19% from its yearly high (879.78 USD on September 23), and domestic investors appear to have used this as a buying opportunity. Hyungtae Kim, a researcher at Shinhan Financial Investment, said, "The company plans to increase production of DUV and EUV equipment by 1.5 times and 2 times respectively by 2025. From a long-term perspective, EUV demand will inevitably increase significantly due to the miniaturization of front-end industry processes, making it the company with the clearest growth visibility." Investors also increased net purchases of Facebook (2.046 billion KRW), Alphabet (1.405 billion KRW), Merck (784 million KRW), and PayPal (617 million KRW).

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