‘Smart money’ flows back to stocks
After months of hibernation amid a slump in the local stock market, deep-pocketed individual investors armed with smart investment strategies, which local analysts call “smart-money,” are buying stocks again, according to a local brokerage yesterday.The change is a sign that the local stock market will likely shake off its bearish trend in the months to come, the brokerage said.
Samsung Securities said in a report that “real customer deposits,” which analysts use to gauge the inflow and outflow of smart money, in February began to reverse a downward trend that has lasted several months.
The report said real customer deposits passed 14 trillion won ($14.8 billion) in mid-October 2007 before starting to fall, and reaching 8.9 trillion won on Feb. 5.
After the three-day Lunar New Year holiday on Feb. 6-8, however, it began to rise, gaining 1.3 trillion won during the two days through Feb. 12 to 10.2 trillion won.
Local analysts define real customer deposits as customer deposits minus net buying by institutional investors and foreign investors, and changes in margin debt and other receivables.
You Seung-min, a Samsung Securities analyst who wrote the report, said the measure’s growth is a sign of recovery for the stock market as smart money pre-emptively responds to changes in the market.
“It is a very positive sign that the decrease in real customer deposits are slowing to a halt and will likely rebound in February,” You said.
You said that speculative-but-smart short-term investments are gradually finding their way back into the market and will soon be followed by the investments of other individuals.
The nation’s benchmark Kospi has so far shed 202.36 points this year to 1,694.77 yesterday. Last year, the index continued to rise at an unprecedented pace and passed the 2,000-point mark for the first time on July 25.
By Moon Gwang-lip Staff Reporter [joe@joongang.co.kr]
with the Korea JoongAng Daily
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