Odaily Planet Daily report: South Korea’s stock market has recently experienced increased volatility, with investors showing a clear decline in risk appetite as capital flows back into safer assets such as banks. Due to adjustments in the semiconductor sector and stricter regulation of leveraged investments, funds awaiting investment have rapidly withdrawn from the South Korean stock market, giving rise to a phenomenon of “reverse capital migration.”
Data shows that as of the end of July, the total term deposit balances of South Korea’s five largest banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—reached KRW 973.49 trillion, an increase of KRW 24.09 trillion from the previous month, marking the largest monthly increase this year.
Surrounding funds in the stock market have also significantly contracted. According to data from the Korea Financial Investment Association, investor securities account deposits—funds held for stock trading—reached a record high of KRW 139.69 trillion on June 4, but had declined to KRW 107.20 trillion by July 28, a reduction of over KRW 32 trillion in less than two months. Meanwhile, the margin loan balance, which reflects the scale of margin trading in the market, fell to KRW 33.19 trillion during the same period, down approximately KRW 4.5 trillion, or about 12%, from the peak of KRW 37.72 trillion recorded on July 2. (Daum)