Korean stock market volatility scares off investors, market "ammunition reserves" shrink

Odaily News: As the Korea Composite Stock Price Index (KOSPI) has experienced sharp fluctuations since July, even investor deposits, which serve as a pool of waiting funds in the stock market, are rapidly declining. Last month, the average daily deposit size of investors plummeted by nearly 20 trillion Korean won compared to the previous month. This level is about 10 trillion Korean won lower than in March of this year, when KOSPI underwent a correction due to the outbreak of military conflict between the United States and Iran.

According to data released by the Korea Financial Investment Association on the 3rd, as of the 30th of last month, the day KOSPI hit a cyclical low, investor deposits stood at 104.6584 trillion Korean won. Compared to the all-time high of 139.6948 trillion Korean won recorded on June 4th, this represents a reduction of more than 35 trillion Korean won in just about two months. Investor deposits refer to funds deposited by investors into securities company accounts for purchasing stocks. The larger the pool of funds, the higher the likelihood of increased market liquidity. When deposits decrease, the supply-demand momentum in the market inevitably weakens.