Impact of Stock Plunge on Donghak Ants' 'Jjubjub'?... Investment Deposits Fall Below 57 Trillion Won Again

[Image source=Yonhap News]

[Asia Economy Reporter Ji Yeon-jin] Amid a sharp decline in the domestic stock market, individual investors have engaged in bargain hunting, causing market waiting funds to fall once again to their lowest level of the year.

According to the Korea Financial Investment Association on the 23rd, as of the 21st, investor deposits amounted to 56.9621 trillion won, down by 243.4 billion won from 57.2055 trillion won the previous day. This marks a new low for the year, following a drop to 56.997 trillion won on the 9th of this month, which was the first time in 18 months since November 2020 that the amount fell below 56 trillion won.

Investor deposits refer to funds that individual investors deposit with securities firms to trade investment products. At the end of December 2019, before countries began injecting liquidity due to the COVID-19 pandemic, the amount was around 27 trillion won. It then surged sharply from the following year during the COVID-19 bull market, surpassing 77 trillion won in July last year. Since the second half of last year, as the market entered a prolonged bearish sideways trend, deposits have been declining.

Typically, a decrease in deposits can occur when individuals leave the stock market due to poor market performance, but it can also indicate that deposits are being used for bargain buying at low prices. In fact, from the beginning of this month until the 21st, individuals net purchased 4.7217 trillion won in the domestic stock market. During this period, deposits decreased by a similar amount, from 61.6321 trillion won on the 21st to about 4.67 trillion won less.

Experts expect the decline in customer deposits to continue for the time being. Lee Kyung-soo, a researcher at Hana Financial Investment, said, "Customer deposits can rebound only if there is a sharp reversal such as a trend reversal to a downward interest rate, improvement in pension and foreign investor supply and demand, a trend rebound in the index, or a rebound in real estate prices." He added, "Considering the rotation market trend (overcorrection factor in stock price decline) and the strength of undervalued stocks, which are key market characteristics in an environment of decreasing deposits, combining with stocks with upward earnings revisions will make it a promising factor model during periods of declining customer deposits."

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