Reflecting Increased Market Volatility
The Korea Financial Investment Association announced on March 9 that the money market fund (MMF) balance jumped to 147,804.2 billion won on March 5 after breaking the 140 trillion won mark for the first time in history on Feb. 6. Short-term floating funds are continuing to increase along with the volatility of the global stock market.
In the meantime, individual investors’ stock purchase based on borrowings from securities finance companies totaled 9,996.9 billion won, divided into 4,503.8 billion won in KOSPI and 5,493.1 billion won in KOSDAQ. The amount remained above 10 trillion won for about one month and fell below 10 trillion won on March 4. In general, the amount is proportional to the number of investors expecting that the stock market will improve and decreases as the stock market becomes increasingly volatile.
Experts point out that investment opportunities will come if the spread of COVID-19 begins to subside. “During the spread of SARS and MERS in the past, the volatility increased along with the number of confirmed infections and the stock market was stabilized as the number fell,” Kiwoom Securities explained, adding, “The market will rebound once the ongoing fear of investors is overcome, although the pace of recovery may be somewhat slow due to spreading trade protectionism and supply setbacks in China attributable to COVID-19.”