By Yoon Ja-young
Staff Reporter
Yoo Sung-ho, a college professor, is excited. Hyundai Heavy Industries shares, which he bought at around 130,000 won per share at the beginning of the year, are about to break 400,000 won. Yoo, who has shunned the stock market since the collapse of the bourse after the Seoul Summer Olympic in 1988, is now gathering every penny to buy shares. He even withdrew deposits he had at the private school teachers' fund.
As the stock market records new highs everyday, Koreans are rushing to buy. They are canceling deposits, selling real estate and even taking out loans to put money on the bourse.
Kim Yun-young, a housewife, stopped paying back the principal of her housing mortgage. Instead, she is putting money in the fund. ``I figured that it would be better to take the burden of paying interest for the loan than to lose chances to put money into the stock market.''
``I see a number of customers canceling deposits to put in funds or to invest in the stock market for themselves. Young customers in their 20s and 30s are more likely to do so,'' said an official at Woori Bank.
Money is definitely moving to the stock market, which is absorbing liquidity like a black hole.
According to the Korea Exchange (KRX), the country's stock market operator, the money deposited at securities accounts for stock investment recorded 15.4 trillion won, Tuesday, nearly doubling from the 8.5 trillion won of the beginning of the year. The Asset Management Association of Korea said securities-type funds are seeing around a 177 billion won inflow everyday since the end of June. The number of active securities accounts also rose to 9.7 million as of the end of June, up 18.4 percent from the beginning of the year.
According to online bookstore YES24, the sales of books on stock investment recorded an 80.8 percent year-on-year growth until May, and tens of thousands of stock investor clubs on the Internet are crowded with individual investors.
The stock market has become the best investment for Koreans amid the abundant liquidity and the government's strict regulation on real estate speculation. With the bullish KOSPI rising 20.82 percent and the KOSDAQ 25.55 percent during the first half of this year, individual investors have high expectations. They are not satisfied with the 10 percent investment returns.
Stocks definitely have become the main theme of conversation. Yun Hye-suk, a successful individual investor, was surrounded by relatives at a family gathering last weekend. They asked her to recommend good stocks. ``I told them now is about the last chance to make money. If rich people sought apartments in Gangnam in the past, now it's stocks.''
Some show concern that it reminds them of the IT bubble collapse around the early 2000s, when people put money into the KOSDAQ.
The recent correction of the Chinese stock market also serves as a lesson. According to a survey by the Shanghai Daily, 70 percent of individual investors saw losses this year, and the daily transactions on the Shanghai bourse decreased to 115 billion yuan at the beginning of July, plummeting over 70 percent from the 407.2 billion yuan on May 30.
Most analysts, however, are optimistic about the Korean stock market, and say things are different. Long-term investment on installment type funds has become the norm, and more investors are focusing on value stocks rather than on growth stocks. Though there may be short-term corrections, the overall outlook is still good.
The KOSPI closed at 1909.75, Thursday, 19.79 points, or 1.05 percent up from the previous day.