Individual stock investors’ loss exceeds W100 trillion

Written by changthai11 on Wednesday, October 8th, 2008

According to the data at the Korea Exchange and securities firms, the market cap of shares and overseas equities owned by individual investors dropped by 104.2 trillion won as of the end of September. This includes 62.7 trillion won lost in shares in the Seoul bourse and 41.5 trillion won in Korean and overseas equity investment.

Investors’ direct investment fell by 247.8 trillion won in market cap from a year earlier, the data showed. Individual investors are estimated to have lost 62.4 trillion won, as they make up 25 percent of the investors in the main bourse.

Institutional investors accounted for 22.8 percent of the total investors, losing 56.5 trillion won during the same period while foreign investors, making up 30.9 percent of the market, lost 76.5 trillion won, the data showed.

The benchmark KOSPI fell 23.67 percent to 1,448.06 from 1.897.13 during the same period and Kosdaq dropped by 37.41 percent to 440.77 from 704.23.

Zeroin, an investment research firm, estimated institutional investors’ loss in the domestic equity funds to be around 17.7 trillion won. But it said that most of the loss is estimated to have derived from individual investors who pitched in to invest in equity products through agents.

Losses from overseas equity investment amounted to 23.7 trillion won. In total, some 41.5 trillion won of individual investment vanished in domestic and overseas equity investment, Zeroin said.

An industry official said that individual investment is expected to see a further loss as global financial instability is expected to continue through the fourth quarter.

The Asset Management Association in Korea, however, said that investors should reftrain from selling on worries of slumping economy since the local market has maintained stability and that long-term investment could result in profits.

By Jeong Hyeon-ji

(hannahj@heraldm.com)