Retail investors are driving South Korea’s stock market

Article Excerpt

The only stock exchange in South Korea, the Korea Exchange, is home to over 2,000 companies, with a combined market value of $1.5 trillion; this ranks the exchange among the top 15 in the world. The market is also very liquid with $1.9 trillion in equities traded in 2019. That makes it the 10th largest exchange. Noteworthy is that almost 70% of the trading on this exchange comes from retail investors. Retail investors (locally known as “ants”) have become large buyers of Korean stocks since early 2020. Since March 2020, margin loans to retail investors have surged 350%, while trading volumes have increased by 150%. Deposits held by retail investors at brokerages have also increased dramatically as investors move more money into accounts for trading. Retail investors in Korea and other Asian markets have also discovered the power of social media on their investments. In South Korea, traders recently drove around in a “battle bus,” covered in anti-short-selling slogans. Around 30,000 Korean traders came together…