Over 10 Mil. In Stock Accounts

Korea Securities Dealers Association announces surprising expansion in investors in stocks

Korea Securities Dealers Association announced recently that the number of active stock accounts at securities dealers across the country totaled 10,009,800 as of July 31 for the first time the 10 million level. The account numbers only include those that were actively used for trading securities with deposits more than 100,000 won and excludes the accounts that have been dormant for the past six months.
In detailed analysis shows that the active accounts totaled 9 million in 2000, but it began to slide until 2004. But the number began to pick up from the middle of 2005 and in August, last year, the number expanded as many as 8 million. A year later it increased by 2 million. In May, the number broke the 9 million level and in only 2 months, it passed the 10 million level, showing that the stock market is attracting increasing investors lately. It shows that the number increased 11,000 accounts daily this year so far, up 18.8 percent compared to those in the early period of the year.
The number of active stock accounts compared to economically active people made up 39.4 percent in 2000 but fell to 28.4 percent in 2004. The number began to pick up in 2005 and by the end of June, it showed that four of ten people in the country maintained stock accounts with economically active persons totaling 24.59 million. Both stock investors and the number of economically active persons have been rising at the same time, if the trend is any guide.
Director Park Byung-joo in charge of member service of KSDA, said the account number is an indication that the management paradigm of household financial assets has shifted to investment from savings channeling money to the stock market. He predicted that the stock prices would continue to rise for the time being as a result of funds increase.
Last month, the KSDA hosted a meeting of its member firms and the major topics of the meeting included such matters as the movement of stock prices at home, the pattern of stock market funds and trends by investors. It also took up overseas stock market movements.
Also included in the discussion were the current situation on credit loans in the H1 and measures to be promoted to improve risk management for credit loans.
The tasks ahead to improve the development of the securities market were also brought on the discussion table. The first one was continued effort to advance the stock market to the level of advanced countries. Second one was the expansion of stock market's ability to procure funds. The third one was the settling down a sound and long-term investment culture and the fourth and final one development of new products.
The stock market began the year with 1,435 points in KOSPI and the index began to take off in April and has recently climbed to the highest ever reaching over 2,000. The reasons for the unprecedented jump included abundant funds inflow into the market, the possible solution of North Korea's nuke problems, the possibility for upgrade for sovereign credit rating, signs for the economic recovery and strong performances by global stock exchanges.
From April, funds flowed into the stock market amounted to 26.2 trillion won in various forms including stock-type funds, customer deposits, and the balance of credit loans. The share-type funds left amounted to 67.4 trillion won as of July 12, up from 51.6 trillion won from March 30. It amounted to 46.6 trillion won as of the end of December, 2006. nw

KSDA Chairman Hwang Kun-ho presides over an emergency meeting of heads of securities dealer firms across the country to discuss measures to cool the stock market which has been getting "too hot"on July 16.

Chairman Hwang Kun-ho of Korea Securities Dealers Association.