Fluctuations in South Korean Stock Market Lead to Over 24 Trillion Won in Inflows to Five Major Banks

The South Korean stock market has recently experienced increased volatility, leading to a decrease in investors' risk appetite and a flow of funds back into banks and other safe-haven assets. Due to adjustments in the semiconductor sector and stricter regulations on leveraged investments, a phenomenon of "reverse capital migration" has emerged. Data shows that as of the end of July, the balance of time deposits at South Korea's five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) reached 973.49 trillion won, an increase of 24.09 trillion won from the end of the previous month, marking the largest monthly increase this year. Funds surrounding the stock market have also significantly contracted. According to the Korea Financial Investment Association, the deposits in investors' securities accounts peaked at a historical high of 139.69 trillion won on June 4, but had dropped to 107.20 trillion won by July 28, a decrease of over 32 trillion won. The balance of credit trading financing, which represents the scale of market financing transactions, fell to 33.19 trillion won during the same period, down approximately 4.5 trillion won from the peak of 37.72 trillion won on July 2, a decline of about 12%.