Individuals Leaving Stock Market Amidst Global Economic Woes
By Kim So-yeon (Money Today Reporter)
As secondary battery stocks continue to fall and negative events such as high interest rates in the United States and the Israeli-Palestinian War persist, individual investors are withdrawing from the stock market. This trend raises concerns about the loss of vitality in the domestic stock market amidst the worsening global economic situation. The KOSDAQ market, in particular, which is heavily influenced by individual investors, is expected to face significant challenges.
According to the Korea Financial Investment Association, investor deposits, which serve as reserves for individual investors in the stock market, have plummeted to 47.45 trillion won as of the 6th of October. This marks a decline of approximately 5 trillion won in just the past three days.
During the rally of secondary battery stocks last July, investor deposits had reached 58 trillion won, and they remained steady at an average of 53.21 trillion won even during fluctuations in EcoPro’s sibling stocks in August. Even in September, when US Treasury interest rates started surging, they remained at an average of 51 trillion won.
However, the situation has changed this month with the unusual global economic environment resulting from the war between Israel and Palestine during the Hangul Day holiday. As a result, individual investors have begun withdrawing from the market. Investor deposits sharply declined from 52.25 trillion won on the 4th to 50.49 trillion won on the 5th, and further down to 47.45 trillion won on the 6th.
The selling pressure from individuals is also noticeable in the KOSDAQ market, where their influence is strong. Net selling has been recorded for four consecutive days, amounting to a total of 690 billion won. In the same period, 430 billion won worth of shares were sold in the KOSPI market. Individuals were the only group showing net selling in the KOSDAQ market. As individuals exit the market, the KOSDAQ index continues its downward trend, reaching 800 level. The previous day’s KOSDAQ closing price of 795.00 was the lowest in approximately 7 months since March 16 (781.98).
As of September this year, individuals have sold 2.36 trillion won worth of stocks in the KOSPI market while buying 8.31 trillion won worth of stocks in the KOSDAQ market, establishing themselves as major players in the KOSDAQ rally. Thus, the recent withdrawal of individuals from KOSDAQ further dims the market’s outlook.
Moreover, the departure of individual investors is causing a rapid decrease in trading volume in the KOSDAQ market. According to the Korea Exchange, the average daily trading volume in the KOSDAQ market dropped from 12.12 trillion won in August to 10.74 trillion won in September, and further down to 6.86 trillion won this month. Despite the KOSDAQ index rising more than 2% on this day, the trading volume only increased by 6.63 trillion won.
Examining the trading status by stock, individual investors have sold many shares of secondary battery companies this month, including EcoPro (KRW 189 billion), Geumyang (KRW 42 billion), POSCO International (KRW 37 billion), and POSCO Future M (KRW 27 billion). Instead, there is a clear shift towards large-cap stocks such as Samsung Electronics (KRW 382 billion), Doosan Robotics (KRW 294 billion), and SK Innovation (KRW 101 billion).
Lee Gyeong-soo, a researcher at Hana Securities, commented, “For Korean growth stocks to maintain their strength, it is crucial to see net purchases in KOSDAQ, a platform for individual investors. However, individuals have refrained from investing in KOSDAQ for a month since August. This will act as an additional burden,” he predicted.
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Money Today Reporter Kim So-yeon | 2023.10.11 17:19
Design Reporter Lim Jong-cheol / Photo = Design Reporter Lim Jong-cheol As secondary battery stocks have recently fallen and negative news such as high interest rates in the United States and the Israeli-Palestinian War have continued, Donghak ants continue to leave the stock market. There are concerns that the domestic stock market will lose vitality as individuals who have supported the market leave amid the worsening global economic situation. In particular, the KOSDAQ market, which has a lot of individual influence, is expected to take a big hit.
According to the Korea Financial Investment Association on the 11th, investor deposits, which are reserves for individual investors in the stock market, plunged to 47.45 trillion won on the 6th. It has dropped about 5 trillion won in the last three days alone.
Investor deposits, which once rose to 58 trillion won during the secondary battery stock rally last July, remained firm at the daily average of 53.21 trillion won even in August when EcoPro’s sibling stocks fluctuated. Even in September, when US Treasury interest rates began to soar, they remained at an average of 51 trillion won.
However, the atmosphere changed this month. As the global economic environment took an unusual turn due to the war between Israel and Palestine during the Hangul Day holiday, individuals began to withdraw from the market. Investor deposits fell sharply from 52.25 trillion won on the 4th to 50.49 trillion won on the 5th and 47.45 trillion won on the 6th.
Individuals are also accelerating their selling position in the stock market. In particular, in the KOSDAQ market, where individual influence is strong, net selling was recorded for four consecutive days from the 5th to today, selling a total of 690 billion won. During the same period, 430 billion won shares were sold in the KOSPI market. During this period, individuals were the only ones to show net selling in the KOSDAQ market. As individuals exited the market, the KOSDAQ index continued its downward trend, reaching the previous day’s 800 level. The previous day’s KOSDAQ closing price (795.00) was the lowest in about 7 months since March 16 (781.98).
As of September this year, individuals have sold 2.36 trillion stocks won in the KOSPI market while buying 8.31 trillion stocks won in the KOSDAQ market, establishing themselves as the main players in the KOSDAQ rally. Therefore, the recent withdrawal of individuals from KOSDAQ further darkens the outlook for the KOSDAQ market.
Due to the departure of Donghak Ant, the trading volume of the KOSDAQ market is also decreasing rapidly. According to the Korea Exchange, the average daily trading volume in the KOSDAQ market fell from 12.12 trillion won in August to 10.74 trillion won in September, and then to 6.86 trillion won this month. On this day, the KOSDAQ index rose more than 2%, but the trading volume only gained 6.63 trillion.
Looking at the trading status by stock, individual investors sold many secondary battery stocks this month, including EcoPro (KRW 189 billion), Geumyang (KRW 42 billion), POSCO International (KRW 37 billion), and POSCO Future M (KRW 27). billion). Instead, there is a clear move to switch to large-cap stocks such as Samsung Electronics (KRW 382 billion), Doosan Robotics (KRW 294 billion), and SK Innovation (KRW 101 billion).
Lee Gyeong-soo, a researcher at Hana Securities, said, “For Korean growth stocks to remain strong, net purchases of KOSDAQ, a playground for individuals, are essential, but individuals have stopped visiting KOSDAQ for a month August.” “It will act as an additional burden,” he predicted.
[저작권자 @머니투데이, 무단전재 및 재배포 금지]
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