The baby boomers’ exodus from the stock market was due to their increase in the portion of retirement pension and insurance accounts to save for their retirement. (image: Kobizmedia/Korea Bizwire)
SEOUL, June 11 (Korea Bizwire) – According to a recent survey on the stock market, baby boomers are leaving the market as they try to increase the portion of investment in pension and insurance accounts preparing for their post-retirement lives.
According to the Korea Exchange’s survey on stock investors and their holding volume of a total of 1,935 listed companies, the number of total stock investors increased while the number of baby boomers aged over 55 decreased.
As of December 2013, the total number of stock investors marked 5.08 million, up 60,000 from 2012. The Korea Exchange said that the increase in the stock holder numbers amid the extremely slow trading in the market was thanks to the increased number of economically active population. During the same period, the economically active population grew as much as 600,000.
However, the survey showed that the baby boomers born from 1955 to 1963 are fleeing from the stock market. During the period, stock investors aged over 55 fell to 1.49 million from 1.60 million. Meanwhile, those in their 20s and 30s increased as much as 90,000 from 1.25 million to 1.34 million.
According to a report by Bank of Korea, Koreans retire at 54 years old on the average, but work until 71 years. The baby boomer generation, which refers to people born in Korea between 1955 and 1963, is falling into the poverty trap of old age.
The Bank of Korea study reaffirms the troubles confronting the retiring baby boomer. Most of them require help because of falling home prices or those that need loans to start their own businesses in the latter years of life. (source: Bank of Korea)
The baby boomers’ exodus from the stock market was due to their increase in the portion of retirement pension and insurance accounts to save for their retirement. With their exodus, the average age of stock investors fell 47.8 from 48.6.
Among the total economically active population and the total population, the stock investors formed 19.5 percent and 10.0 percent respectively, which means one out of five economically active populations and one out of ten Koreans are investing in the stock market.
Compared with the average age of stock investors in the KOSPI of 48.6, younger generation seemed to prefer the KOSDAQ. The average age of KOSDAQ market investors was 2.8 years younger with 45.8.
By region, 54.5 percent of the investors are residing in the metropolitan area of Seoul, Incheon and Gyeonggi Province and they accounted for 84 percent of the market capitalization. During the period, 100,000 investors disappeared in the metropolitan area, while the stock investors in the Chungcheong Provinces increased as much as 100,000 thanks to the population inflow to the new Sejong Administrative City.
KOSPI & KOSDAQ
The Korea Composite Stock Price Index or KOSPI is the index of all common stocks traded on the Stock Market Division—previously, Korea Stock Exchange—of the Korea Exchange. It is the representative stock market index of South Korea, like the Dow Jones Industrial Average or S&P 500 in the United States.
KOSDAQ (Korean Securities Dealers Automated Quotations) is a trading board of Korea Exchange (KRX) in South Korea established in 1996. Initially set up by Korea Financial Investment Association as an independent stock market from the Korean Stock Exchange, it was benchmarked from the American counterpart, NASDAQ. KOSDAQ is an electronic stock market, just like NASDAQ. The open hours for the market are 09:00AM to 03:00PM KST. (source: Wikipedia)
Meanwhile, foreign investors including institutional investors marked 37,000 and the number of individual investors was 5.02 million. Among the total market capitalization, foreigners had the largest portion with 32.9 percent, followed by individual investors (23.6%) and institutions (16.1%).
Written by John Choi (johnchoi@koreabizwire.com)
