The size of settlements in Korea's securities market in the first quarter rose sharply from a year earlier. In particular, stock settlement funds surged, leading the overall increase in settlement amounts.
Korea Securities Depository (KSD) said on Apr. 13 that average daily securities settlement funds in the first quarter came to 35.844 trillion won. That was up 15.3% from the previous quarter (31.092 trillion won) and 31.6% from a year earlier (27.228 trillion won).
Of that, stock settlement funds totaled 6.478 trillion won, soaring 77.9% from the previous quarter and a steep 246.2% from the same period a year earlier. In contrast, bond settlement funds reached 29.366 trillion won, up 7.0% from the previous quarter and 15.8% from a year earlier.
Specifically, average daily settlement funds in the on-exchange stock market were 2.861 trillion won, up 78.2% from the previous quarter. During the same period, transaction value also increased 85.2% to 83.798 trillion won, and the netting rate inched up 0.1 percentage point to 96.6%.
By contrast, average daily settlement funds in the on-exchange bond market were 2.92 trillion won, nearly flat from the previous quarter, down 0.1%. Transaction value fell 19.0% to 9.268 trillion won, and the netting rate declined 5.9 percentage points to 68.5%.
Settlement volumes by institutional investors also increased. Stock settlements by institutional investors averaged 3.617 trillion won per day, up 77.6% from the previous quarter, while bond settlements by institutional investors were 26.446 trillion won, up 7.8%. In particular, short-term bond settlement funds were 7.387 trillion won, up 10.5% from the previous quarter and 47.7% from a year earlier.
By bond type, Government Bonds accounted for the largest share at an average daily 7.589 trillion won (52.9%), followed by financial bonds at 3.852 trillion won (26.9%) and special bonds at 1.126 trillion won (7.9%).
Overall, the increase in securities settlement funds in the first quarter was mainly driven by a market-wide rise in stock settlements.
Looking at the trend over the past five quarters, overall settlement funds expanded from an average daily 31.1 trillion won in the fourth quarter of last year to 35.8 trillion won in the first quarter, while stock settlement funds jumped markedly from the 3.6 trillion won range to about 6.5 trillion won over the same period. Bond settlement funds showed a relatively moderate increase from 27.5 trillion won to 29.3 trillion won.