In a volatile market, individual investors are responding more shrewdly. Every time the market swings, they secure cash and wait, but when the market plunges, they clearly pursue a "wave-riding" approach to seize large-scale buying opportunities.
According to the Korea Financial Investment Association on the 24th, investor deposits totaled 120.6968 trillion won as of the 20th. That was an increase of more than 5 trillion won in a single day compared with the previous day, the 19th (115.6443 trillion won). In contrast, the balance of margin lending for credit transactions, a gauge of debt-fueled investing, fell 50 billion won over the period to 33.255 trillion won.
Typically, an increase in deposits means more idle funds have been placed in securities accounts to buy stocks, and a decrease in margin lending for credit transactions means less borrowing to invest. In other words, they loaded cash for stock trading while watching the market instead of using leverage.
Outstanding receivables from discretionary trading used for ultra-short-term deferred purchases (money not repaid within three trading days including the day of the deferred trade) also fell to 982.4 billion won over the same period, dropping below 1 trillion won for the first time since Feb. 20. That is the lowest level since early January this year.
The KOSPI started last week at 5,487.24 and finished at 5,781.20, up 5.36%. Daily swings were in the 2% to 5% range, which was relatively less volatile compared with the 7% to 12% surges and slumps seen early this month.
Overall heat in the stock market also cooled. The average daily transaction value on the main board last week (the 16th to the 20th) was 25.5873 trillion won, nearly half of the 48.0987 trillion won in the first week of March (the 3rd to the 6th).
Experts said this trend shows investors are putting more weight on defensive responses and managing risk amid a volatile market.
Lee Sang-yeon of Shinyoung Securities said, "As the Middle East war has lasted longer than expected, investors have grown weary of the volatility," adding, "Because we have not completely escaped geopolitical risk yet, they are judging more carefully rather than responding aggressively."
However, when volatility expands again, they move immediately to buy. In fact, on the 23rd, as concerns about an escalation of the Middle East war sent the KOSPI down nearly 400 points (-6.49%), individual investors net bought 7 trillion won on the main board. That is an all-time high.
Lee Sang-jun of NH Investment & Securities said, "When volatility eases, investors shift to a wait-and-see stance, then take a more active buying and selling approach in surging or plunging markets," adding, "With macro conditions like the Middle East crisis persisting, deposits and credit financing balances can swing sharply."