July 09, 2021 12:47
Company shares now account for more than 20 percent of household assets for the first time as retail investors ride a stock market bonanza.
According to the Bank of Korea on Thursday, households and non-profit groups parked W96.1 trillion in stocks and bank deposits in the first quarter this year (US$1=W1,149). After W52.1 trillion in borrowings are subtracted, net financial funds total W44 trillion.
Debts maturing in more than a year totaled W38 trillion, up more than three times on-year as Koreans borrowed cash to invest in stocks. Short-term loans from brokerages also increased by W8.4 trillion, and the bulk of the borrowed money is thought to have flowed into the stock market.
Investments in domestic stocks increased by W36.5 trillion and in foreign stocks by W12.5 trillion, the fastest rise since the central bank began tallying such data in 2009.
The proportion of equity investments in household assets has reached 20.3 percent or around W943 trillion as a result, up from 13.7 percent in the first quarter last year.
Businesses also parked their money in the stock market instead of the bank due to ultra-low interest rates. In the first quarter they had W12.2 trillion in fund products and bought W550 billion worth of domestic shares and W600 billion worth of foreign equity.
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