Stock market funds on the sidelines swell again... Investors left money from stock sales untouched [South Korean stock market grows larger]

Funds waiting on the sidelines in the stock market have come close to an all-time high. Investor deposits, which had fallen to the 107 trillion won range earlier this month amid Middle East risks, recovered to the 125 trillion won range in just two weeks. The gap from the record high has narrowed to about 6 trillion won.
According to the Korea Financial Investment Association (KOFIA) on the 28th, investor deposits stood at 125.6869 trillion won as of the 24th. Investor deposits refer to money that investors place in securities accounts to buy stocks, making them a key source of funds waiting on the sidelines.
The previous record high was 132.0682 trillion won, set on March 4. The current gap is 6.3813 trillion won. At the start of last month, deposits were still above 130 trillion won. But they quickly declined as geopolitical risks in the Middle East and rising stock market volatility weighed on sentiment. By the 6th of this month, they had dropped to 107.4674 trillion won. That means roughly 25 trillion won disappeared in just over a month.
Since then, as the KOSPI Composite Index rebounded quickly, sidelined funds also began to rise again. Deposits reached 116.1075 trillion won on the 13th, 117.1651 trillion won on the 15th, and 120.5854 trillion won on the 17th, before climbing to 122.5381 trillion won on the 22nd. They then jumped to 126.0351 trillion won on the 23rd, briefly moving back above 126 trillion won, and remained at a high level at 125.6869 trillion won on the 24th. Compared with the low point on the 6th, the figure rose by 18.2195 trillion won in just 18 days.
So far this month, the KOSPI Composite Index has climbed to the 6,600 level on a closing basis, supported by buying from foreign investors and institutions. Large-cap stocks in semiconductors, the defense industry, shipbuilding, and electric power machinery led the gains. Individual investors, meanwhile, focused on taking profits.
Individual investors have net sold about 18.2 trillion won worth of KOSPI Composite Index shares this month. On a monthly basis, that is a massive sell-off that could surpass the figure recorded in September last year. Still, market participants do not see this as a simple exit. Their view is that the cash raised from stock sales has not left the market, but has remained as waiting funds for the next buying opportunity.
“What matters is that the cash individual investors raised by selling stocks is still sitting in securities accounts,” said an industry official. “The rise in deposits is the most direct indicator that they may re-enter the market.”
Leveraged investing is also picking up again. Margin loans stood at 35.463 trillion won as of the 24th. That is up 2.2462 trillion won in just 10 days from 33.2168 trillion won on the 13th.
“The market is now in a phase where earnings and liquidity are working at the same time,” said a financial investment industry official. “Corporate earnings estimates continue to be revised upward, especially for semiconductors, and net buying by foreign investors and institutions is also continuing.” He added, “If individual funds begin to flow back in earnest as well, buying could spread beyond semiconductors to brokerage, domestic demand, and consumer-related sectors.”
dschoi@fnnews.com Choi Doo-sun Reporter