Retail investors in the Korean stock market maintained net buying during the recent correction, but their purchasing power is weakening as credit financing and investor deposits decline, according to an SK Securities report published on the 14th. Analyst Kang Dae-seung noted that total credit financing growth turned negative month-over-month, while investor deposits—funds awaiting deployment—decreased sharply this month. The margin call ratio relative to outstanding credit reached 10.2% as of the 9th, the highest level in over a month. The erosion of retail buying power coincides with concerns over the pace of AI industry expansion, triggered by Meta's announcement of cloud business entry earlier this month, which sparked fears of overcapacity in AI computing supply.
Credit Financing Growth Turns Negative as Investor Deposits Fall
Total credit financing balance growth turned negative on a month-over-month basis, while the growth rate of KOSPI credit financing slowed rapidly. Investor deposits, commonly referred to as standby funds for purchases, declined steeply this month. Kang stated that "the net buying scale is being maintained, but the fundamental financial strength of credit and deposits that supported it is already weakening."
Margin Call Ratio Reaches 10.2% as of the 9th
The ratio of forced liquidations to outstanding margin debt rose to 10.2% as of the 9th, the highest level in over a month and exceeding the ratio during the Middle East conflict when market volatility expanded. This indicates reduced capacity to absorb losses and heightened risk of further forced selling if the market declines.
Meta Cloud Entry Sparks AI Supply Glut Concerns
The direct trigger for shaken investor sentiment was doubt about the growth speed of the AI industry. After Meta announced plans to enter the cloud business earlier this month, concerns over AI computing supply glut spread, expanding the decline in Korean and US semiconductor stocks. SK Securities noted that while Meta and SpaceX's market entry does not necessarily mean oversupply, investors fatigued by price gains are seeking confirmation that actual investment demand persists. The firm analyzed that during the dot-com bubble collapse, the "dark fiber" debate emerged over installed but unused fiber optics, yet the period of declining global fiber optic installation lasted only three years after the collapse.
Cosmetics and Consumer Staples Outperform Semiconductors
While most sectors showed weakness alongside the semiconductor index decline, cosmetics, consumer staples, and media/education sectors displayed relatively strong performance. Kang stated that "in a period where semiconductors are searching for the next upward momentum, responding with sector rotation is effective."
US Big Tech Q2 Earnings Expected Late This Month
The catalyst for a semiconductor stock rebound is expected to be US Big Tech companies' Q2 earnings announcements starting late this month. If hyperscalers raise capex guidance or reaffirm existing investment plans, concerns over AI growth slowdown could ease and semiconductor stock corrections could stabilize. The KOSPI semiconductor index's 12-month forward P/E ratio has fallen to historical lows, and the gap between PBR compared to operating margin forecasts has widened due to recent price declines. Kang stated that "the timing of confirming Big Tech's capex guidance needs to be examined as an opportunity to increase semiconductor weighting."
FAQ
What did SK Securities report on the 14th about retail investor buying power?
SK Securities analyst Kang Dae-seung reported on the 14th that retail investors' buying power is weakening despite continued net purchases. Total credit financing growth turned negative month-over-month, and investor deposits decreased sharply this month. The margin call ratio reached 10.2% as of the 9th, the highest in over a month.
Why did semiconductor stocks decline after Meta's announcement earlier this month?
After Meta announced plans to enter the cloud business earlier this month, concerns over AI computing supply glut spread, expanding the decline in Korean and US semiconductor stocks. Investors sought confirmation that actual investment demand persists amid fatigue from price gains.
When are US Big Tech Q2 earnings expected?
US Big Tech companies' Q2 earnings announcements are expected to begin late this month. SK Securities views the confirmation of capex guidance during these announcements as a potential catalyst for semiconductor stock rebound and an opportunity to increase semiconductor weighting.
