In January, Retail Investors Swept Bonds, 5 Major Securities Firms Sold 5 Trillion Won

[Asia Economy Reporter Kim Daehyun] Individual investors, who have emerged as major players in the bond market since last year, have purchased more than 5 trillion won worth of bonds from the top five securities firms this year as well.

According to the financial investment industry on the 29th, the retail bond sales to individuals by the top five securities firms?Mirae Asset Securities, Samsung Securities, Korea Investment & Securities, KB Securities, and NH Investment & Securities?amounted to 5.0123 trillion won as of the 26th of this year.

Some securities firms have not disclosed figures for electronic short-term bonds (Jeondanchae) and overseas bonds, which are mainly invested in by high-net-worth individuals, so the actual scale of individual bond purchases is expected to be larger.

The retail bond sales exceeding 5 trillion won represent about 1.7 times the amount during the same period last year. In January last year, the retail bond sales to individuals by the top five securities firms were 3.0243 trillion won. During the same period, the net bond purchases by individuals in the over-the-counter bond market, as compiled by the Korea Financial Investment Association, also increased compared to last year.

From the 2nd to the 26th, individual investors’ net bond purchases amounted to 2.3173 trillion won, more than ten times the 203.3 billion won recorded during the same period last year. By bond type, other financial bonds issued by financial companies excluding banks had the largest net purchase volume at 946.1 billion won. Corporate bonds (657.8 billion won), government bonds (372.3 billion won), bank bonds (154.2 billion won), asset-backed securities (ABS, 79.4 billion won), and special bonds (62.1 billion won) followed.

In the stock market, individual investors continue to withdraw. Due to the sluggish stock market, funds are flowing from risky assets to safe assets such as bonds and deposits. According to the Korea Exchange, individual investors have net sold stocks worth 6.4316 trillion won in the KOSPI market as of the 27th this year. Notably, they sold more than 1 trillion won worth of stocks for two consecutive days on the 26th and 27th.