Investing in stocks continues… Over 21% of household financial assets in the second quarter

Thanks to the stock investment craze, stocks accounted for more than 21% of households’ various financial assets. In addition, as demand for housing purchase funds and sluggish private consumption eased, household extracurricular expenses decreased in the second quarter of this year compared to a year ago.

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According to ‘Second quarter of 2021 money circulation statistics (provisional)’ announced by the Bank of Korea on the 8th, the amount of net fund management (surplus funds, spare money) by Korean households and non-profit organizations in the second quarter (April to June) was 24.5 trillion won. recorded This is down 38.3 trillion won from 62.8 trillion won in the same period last year.

An official from the BOK explained, “As the sluggish private consumption has eased and housing investment has expanded, the scale of net management of financial assets (fund management-procurement) has shrunk compared to the second quarter of last year.”

Money circulation is a statistic showing the flow of money management and procurement by economic agents that make up the national economy. Of these, surplus money is money rolled out through deposits, insurance, and stock investment (operating funds) minus borrowed money (procurement funds). also do A decrease in surplus funds means the opposite.

Looking at the flow of money by sector, households and non-profit organizations recorded 80.5 trillion won in fund management and 56 trillion won in procurement.

Stock management continued its upward trend from the previous quarter. During this period, the number of shares issued and invested by residents increased by 29.2 trillion won. This is the second highest level after the first quarter (36.5 trillion won), which was the highest since statistics were compiled in 2009. The KOSPI index rose 7.7 percentage points to 3297 in the second quarter following the first quarter (3061).

Stocks accounted for more than 21% of household financial assets. As of the end of the second quarter, the proportion of deposits in total households’ total financial assets of 4784.3 trillion won was 40.5%, down slightly from 41% in the previous quarter, and the proportion of bonds also decreased to 2.7% from 2.9% in the previous quarter. The share of stocks stood at 21.6% from 20.3% in the previous quarter. Among them, resident-issued stocks and equity shares accounted for 20.2%, and non-resident-issued stocks accounted for 1.3%.

On the other hand, non-financial corporations (company) saw their net procurement scale down due to improved operating profit due to brisk exports. According to the Korea Exchange, the net profit of listed companies in the second quarter was 27.3 trillion won, more than double that of the same period last year (11.5 trillion won). In the case of procurement, short-term borrowing, which surged last year to secure liquidity, was reduced, while deposits decreased and deposits in investment funds increased.

In the second quarter, the general government switched from net procurement to net management (+4.5 trillion won). During this period, the final consumption expenditure amounted to 95.5 trillion won and national tax revenue was 93.3 trillion won. The BOK explained, “Government consumption increased due to active fiscal execution, but national tax revenues also increased significantly, turning it to net management.”