Early Year Decrease from 75 Trillion Won to 50 Trillion Won
[Asia Economy Reporter Hwang Yoon-joo] As interest rates rise and the stock market continues to decline, the attractiveness of stock investment has diminished, causing the funds flowing into the stock market from individual investors to drop to the lowest level this year.
According to the Korea Financial Investment Association on the 25th, the investor deposit, which serves as standby funds for the stock market, was recorded at 50.7793 trillion won as of the 21st.
This is the lowest level so far this year. It is also the lowest since October 7, 2020, when the subscription for Big Hit (now HYBE) IPO absorbed market funds, at 47.733 trillion won.
Excluding the subscription periods for Big Hit and Kakao Games, the current investor deposit has decreased to the lowest level since August 12, 2020, when it was 50.2996 trillion won.
Compared to the yearly high of 75.1073 trillion won recorded on January 27, the listing day of LG Energy Solution, it has decreased by nearly 25 trillion won in about eight months.
Investor deposits refer to the money that investors deposit in securities accounts to buy stocks or the money not withdrawn after selling stocks. As standby funds preparing to enter the stock market, it is considered an indicator to gauge the enthusiasm for stock investment.
With the liquidity-driven market that began in earnest after COVID-19, the enthusiasm for stock investment surged, and investor deposits increased from 27.3933 trillion won at the end of 2019 to 65.5227 trillion won at the end of 2020.
Investor deposits generally maintained above 60 trillion won from early last year to early this year. On May 3 last year, it increased to 77.9018 trillion won, boosted by the refund effect from the SK IE Technology subscription.
However, as interest rates rose, concerns about economic recession became more apparent, and the stock market weakened, investor deposits have steadily decreased since falling to the 50 trillion won level in May.
When interest rates rise, the discount rate on future value increases, reducing the incentive for individual investors to invest in stocks. This is because the opportunity cost of stock investment becomes higher.
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