After the KOSPI topped 9,000 for the first time ever, investor money is pouring into the market. Investor deposits, the cash on the sidelines for stocks, jumped by more than 3 trillion won in a day, and margin loans for stock trading, a key "debt investing" gauge, are closing in on a record high. Hopes for "10,000 points" are building, but some noted that investors should watch for increased volatility after the rapid short-term rally.
According to the Korea Financial Investment Association on the 20th, investor deposits came to 128.4086 trillion won on the 18th, when the KOSPI closed above 9,000 points for the first time. Investor deposits are cash-like funds customers keep in accounts at financial investment firms and are classified as stock market sidelined funds. Investor deposits rose 3.0766 trillion won (3.0%) in one day from 124.6320 trillion won on the 17th.
Margin loan balances for stock trading are also increasing. On the 18th, the balance stood at 37.9797 trillion won, climbing to near the previous record high of 38.0227 trillion won on the 29th of last month. In the main board, the margin loan balance was 28.9275 trillion won, already at an all-time high. As the KOSPI continues to gain led by large semiconductor stocks, margin funds are concentrating on the main board rather than the KOSDAQ.
Meanwhile, the balance of stock-lending transactions, which can gauge short sellers' positions, was 191.4990 trillion won, falling for a third straight day since the 15th.
Still, concerns about an overheated market are growing. The KOSPI fell on the 19th, the day after it broke through 9,000, as profit-taking hit the market. With the index having surged in a short span, some said investors should be cautious.
Lee Kyung-min, a researcher at Daishin Securities, said, "Rather than chasing stocks rising on expectations, it is desirable to focus on rotational strategies centered on stocks with secured earnings visibility."