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Stock-related floating money hits all-time high

All News 08:36 April 20, 2020

SEOUL, April 20 (Yonhap) -- Money floating around the South Korean stock market has reached a new record high amid a recent market recovery following a coronavirus-caused rout, data showed Monday.

The amount of stock-related funds hit 141.79 trillion won (US$116.5 billion) as of Tuesday, up nearly 24 percent from Jan. 20 when South Korea reported its first COVID-19 case, according to the data from the Korea Financial Investment Association.

The figure inched down to 141.73 trillion won two days later.

Stock-related funds refer to money sitting around the equity market in search of investment opportunities. They are comprised of investor deposits at securities firms, repurchase agreement (RP) balances and other funds.

Stock-related floating money hits all-time high - 1

In particular, investor deposits at brokerage houses have shot up nearly 61 percent since Jan. 20 to reach 44.2 trillion won as of Thursday.

Market watchers attributed the surge in stock-related funds to retail investors' rush to the equity market in anticipation of a rebound in share prices.

Individual investors loaded up on shares worth 24.2 trillion won in the country's main and secondary stock markets between Jan. 20 and Friday.

Powered by massive retail buying, the benchmark Korea Composite Stock Price Index (KOSPI) finished at 1,914.53 on Friday, up about 29 percent from the close on March 23.

Analysts forecast the amount of stock-related funds to keep rising for the time being thanks to retail investors' active investment and a sharp rise in liquidity stemming from aggressive quantitative easing by central banks.

The upturn will likely get a further boost from an inflow of funds from the real estate market that is tipped to remain sluggish following the ruling party's landslide victory in the April 15 parliamentary elections, they added.

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