Young South Koreans abandon their national stock markets at unprecedented rates, rather orienting their investments towards American shares and cryptocurrencies.
Decrendy participation of young people
The Korea Securities values deposit reports that investors in the twenties represented only 9.8% of the market last year, against 14.9% in 2021. Those in the thirties decreased to 18.8% compared to 20.7%.
The ownership of the shares between the 30 years increased from 9.9% to 7% between 2020 and 2024, while the ownership of 20 years increased from 2.2% to 1.6%.
Even investors in their forties saw their market share go from 23% to 22.1%. This exodus left investors aged 50 and over having 71% of dominant interior shares.
Market weakness
According to a report by Korea Juongang Daily, Korean markets show disturbing signs as young traders go out. The volume of daily exchanges increased from around 23 won billions ($ 16 billion) at the beginning of 2024 to around 18 billions of Wonaux at the end of the year.
“A market that loses young investors cannot be called healthy,” said Kim Sang-Bong, professor of economics at Hansung University.
Alternative investments flourish
Almost half (47.8%) of cryptocurrency investors in Korea were in the twenties and thirty last year. Their trading volume on the five main Korean crypto scholarships exceeded 2.50 quadrillions of Won, which represents almost 74% of all retail exchanges on Kospi.
Korean investors have also almost doubled foreign action transactions in 2023, from 59 billion shares to 112 billion. This growth continued in 2024, increasing 39% to 156 billion additional share. In the first quarter of this year, Koreans made record net purchases of nearly $ 11 billion in US shares.
Performance leads to change
The main reason for this migration is performance. While the Korean markets were struggling, the composite of the Nasdaq climbed 50% in 2023 and 25% in 2024.
About 72% of Korean investors in American stocks have earned money in 2023, against only 48% in national shares. Cryptocurrencies have worked even better, Bitcoin increasing more than 160% last year to reach $ 108,249, its peak of all time.
Korean markets also suffer from structural problems, the country’s dividends distribution ratio of 27% are ranked in the last of the 16 major economies.
While many experts believe that fundamental changes in corporate governance are necessary, others consider this to be temporary.
“If the Korean market rebounds, they will come back just as quickly,” said Roh Geun-Chang of Hyundai Motor Securities.
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