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KB Securities: Rising Rates Slowing Retail Capital Inflow into Stock Market
Finance · Investment Banks/Brokers · yonhap_finance · 2026-09-09
KB Securities reports that rising interest rates are prompting retail investors to shift funds from the stock market back into time deposits.
What Happened
Slowing Inflows: KB Securities predicts that the pace of retail capital flowing into the stock market will likely decelerate due to the ongoing interest rate hike cycle. The firm notes a clear trend of households increasing their time deposits while demand for credit-based stock investments wanes.
Shift in Capital: Funds that were previously moving into stocks and funds earlier this year have begun to shift back toward time deposits as of August. Bank data shows a significant decline in household loan growth, with credit-based lending specifically turning negative during the period.
Impact of Rate Hikes: As the Bank of Korea continues to raise base interest rates, both borrowing costs and deposit yields have increased. This environment makes the guaranteed interest from deposits more attractive to investors compared to the risks associated with leveraged stock market investments.
Future Outlook: While KB Securities does not anticipate a massive exodus of existing capital from the stock market, it expects a cooling effect on new inflows. The firm suggests that the era of aggressive, debt-fueled retail investment is likely to moderate in the near term.