South Korean Stock Market Volatility Triggers "Reverse Capital Migration": Over 24 Trillion Korean Won Flows into Time Deposits at Five Major Banks

TechFlow News, August 01, according to South Korean media Daum, volatility in the South Korean stock market has intensified recently, investor risk appetite has clearly cooled, and funds are flowing back from the stock market to safe-haven assets such as banks. Due to adjustments in the semiconductor sector and stricter regulation on leveraged investments, idle funds in the South Korean stock market are withdrawing rapidly, and the market is experiencing a phenomenon of "reverse capital migration".

Data shows that as of the end of July, time deposit balances at South Korea's five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) reached 973.49 trillion won, an increase of 24.09 trillion won compared to the end of last month, marking the largest single-month increase this year.

Funds around the stock market have also contracted significantly. According to data from the Korea Financial Investment Association, investor securities account deposits (idle funds used for stock trading) reached a historic high of 139.69 trillion won on June 4, but as of July 28, it has dropped to 107.20 trillion won, a decrease of over 32 trillion won in less than two months. The balance of credit transaction financing, representing the scale of market margin trading, also dropped to 33.19 trillion won during the same period, a decrease of about 4.5 trillion won from the peak of 37.72 trillion won created on July 2, a decline of about 12%.