Kospi Tops 7,000 as Investor Deposits Hit Record 137 Trillion Won

Investor deposits parked on the sidelines of South Korea’s stock market rose to a record after the Kospi climbed above 7,000.

According to the Korea Financial Investment Association and the Korea Exchange, investor deposits stood at 136.989 trillion won as of May 7, topping the previous record of 132.0682 trillion won set on March 4.

Investor deposits are funds investors leave in brokerage accounts to buy shares or sale proceeds left unwithdrawn after stocks are sold. They typically increase when expectations for further stock gains strengthen.

The balance had fallen to 107.4674 trillion won on April 6 in the aftermath of the U.S.-Iran war, but rebounded quickly with the market recovery. It moved back above 130 trillion won on May 6 for the first time in more than two months and neared 137 trillion won a day later, setting a fresh all-time high.

At the same time, bets on a market decline also increased. Outstanding stock lending balances totaled 179.6659 trillion won on May 7. A day earlier, they hit 180.6284 trillion won, surpassing 180 trillion won for the first time.

Stock lending refers to transactions in which institutional investors and others lend shares they hold to other investors. It is regarded as a leading indicator of short selling, in which investors sell borrowed shares first and buy them back later at a lower price if the stock falls.

Margin loans used to invest in stocks also remained elevated. The balance hit a record 36.0683 trillion won on April 29 before easing slightly to 35.5072 trillion won on May 7. That indicates demand for leveraged bets on further share-price gains remains substantial.

Lee Song-ryeol, Hankyung.com reporter yisr0203@hankyung.com