Their cumulative net purchases of domestic stocks and exchange-traded funds (ETFs) totaled 201.85 trillion won during the first seven months of this year, more than 15 times the 13.16 trillion won recorded during the same period last year.
The purchases were made through the Korea Exchange and alternative trading platform Nextrade. Retail investors bought a net 104.55 trillion won in stocks on the benchmark KOSPI, while selling a net 10.34 trillion won on the junior KOSDAQ. They also bought a net 36.95 trillion won in stocks through Nextrade and 70.70 trillion won in ETFs.
The pace of their buying accelerated in recent months, with their net purchases surpassing 100 trillion won on May 15 and nearly doubling in less than three months. The buying has continued despite the KOSPI's sharp fall amid heightened market volatility. As of Aug. 7, cumulative retail net purchases had risen to 214.15 trillion won including 141.83 trillion won in stocks and 72.32 trillion won in ETFs.
From the KOSPI's June peak through Aug. 7, individual investors bought more than 55 trillion won worth of stocks and ETFs, helping absorb heavy selling by foreign investors.
In particular, as the KOSPI fell from its record high of 9,114.55 on June 22 to the 6,200 range on Aug. 7, individual investors bought more than 55 trillion won worth of stocks and ETFs during the period, helping absorb heavy selling by foreign investors.
The aggressive buying raises concerns about growing losses among investors, particularly those who borrowed money to invest.
Investment deposits, often seen as a gauge of potential buying power, fell from nearly 140 trillion won in early June to about 104 trillion won earlier this month. The amount of money investors borrowed to buy stocks, known as outstanding margin loans, also declined, falling below 30 trillion won after approaching 40 trillion won in June.
Still, some analysts caution against interpreting the decline in investment deposits as an immediate sign of weakening retail buying, as they tend to fluctuate with stock prices, meaning they often reflect market sentiment rather than indicate future market prospects.
At the same time, data from the country's five major banks show growing signs of repayment difficulty among some borrowers. The delinquency rate on loans commonly known as overdraft accounts rose to 0.22 percent at the end of June, up from 0.18 percent at the end of last year.
The balance of such loans grew 8.5 percent over the same period to 43.3 trillion won, while overdue balances jumped 33.2 percent to 94.7 billion won.
The delinquency rate on other personal loans also rose to 0.35 percent from 0.30 percent. Their outstanding balance grew 3.6 percent to 107.1 trillion won as of the end of June, while overdue balances increased 19.4 percent to 375 billion won.
Younger and older borrowers were particularly vulnerable, with the delinquency rate on overdraft accounts standing at 0.33 percent for borrowers aged 20 or younger and 0.37 percent for those aged 60 or older, compared with an average of 0.22 percent for all borrowers.
Another source of concern is securities-backed lending. Loans secured by shares of five major listed companies including Samsung Electronics and SK Hynix totaled 2.93 trillion won at 10 major securities firms as of the end of May, up 24.3 percent from the end of last year. If the value of the shares falls sharply, borrowers may be required to provide additional collateral or cash. Failure to do so can result in forced selling, potentially amplifying investment losses and market volatility.
The Bank of Korea warned in a report in June that the rapid expansion of leveraged investments by individual investors could increase market volatility, as forced sales triggered by falling collateral values amid a sharp stock market decline could add further selling pressure.
Retail investors have continued to buy stocks despite the recent decline, helping to offset heavy selling by foreign investors. But analysts say it remains to be seen how long they can keep buying if stock prices stay low and losses from borrowed investments continue to grow.
AJP Takeaways:
- Individual investors in South Korea recorded net purchases of domestic stocks and exchange-traded funds (ETFs) totaling 201.85 trillion won during the first seven months of 2026, according to data from the Korea Exchange released on Aug. 9, 2026.
- The 201.85 trillion won figure for January–July 2026 is more than 15 times the 13.16 trillion won in net purchases individual investors made during the same period in 2025.
- Individual investors' net purchases were made through the Korea Exchange and the alternative trading platform Nextrade, and included a net 104.55 trillion won in stocks on South Korea's benchmark KOSPI index, a net 10.34 trillion won sold on the junior KOSDAQ index, a net 36.95 trillion won in stocks via Nextrade, and 70.70 trillion won in ETFs.
- At South Korea's five major commercial banks, the delinquency rate on overdraft accounts rose to 0.22 percent at the end of June 2026, up from 0.18 percent at the end of 2025.
- The outstanding balance of overdraft account loans at South Korea's five major banks grew 8.5 percent to 43.3 trillion won as of the end of June 2026, while overdue balances on those loans jumped 33.2 percent to 94.7 billion won over the same period.
- Among South Korean bank borrowers, the delinquency rate on overdraft accounts stood at 0.33 percent for those aged 20 or younger and 0.37 percent for those aged 60 or older, both above the 0.22 percent average across all age groups, as of the end of June 2026.
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