South Korean stock market's 'ammunition depot' shrinks 36.5%, retail investors continue net buying but capital replenishment slows.

October 24 — Data from the Korea Financial Investment Association shows that as of October 22, the deposit balances of investors at South Korean securities firms fell to 88.68 trillion won, down about 51 trillion won, or 36.5%, from the historical peak of 139.69 trillion won on June 4, returning to the level at the start of the year. The balance fell below 90 trillion won on October 21, the first time in nearly nine months.

Investor deposits are funds deposited in securities accounts that have not yet been used to buy stocks and other assets, and are usually regarded as potential buying power. A decline in the balance may stem from either spending on stock purchases or fund withdrawals, and the entire decline cannot be equated with capital exiting the stock market.

Retail investors are still net buyers. From June 4 to October 23, individual investors net bought 44.17 trillion won in the KOSPI market and 3.15 trillion won in the KOSDAQ market, while net purchases of ETFs during the same period reached 28.25 trillion won. The report noted that, unlike the first half of the year when new fund inflows exceeded stock purchase spending, in the second half the pace of replenishment has lagged behind consumption, and deposit balances have continued to decline.

The KOSPI index closed at 5,550.30 points on October 23, down nearly 20% over the past month. A securities company official said the recent decline is indeed excessive relative to earnings fundamentals, but the AI industry that previously drove the rally still faces credit risk concerns, and it is too early to expect a sustained rebound.