SEOUL, Feb. 21 (Korea Bizwire) – The local stock market is struggling to attract young investors amid prolonged economic hardships, a record high youth unemployment rate, and an increasing number of “house poor” individuals and families.
Besides the fact that the benchmark Korea Composite Stock Price Index (KOSPI) has hovered in the same 1,850 – 2100 range over the past five years, stock trading just doesn’t seem to be a lucrative investment.
According to SEIBro, a stock information website operated by the Korea Securities Depository, the percentage of investors in their 20s and 30s for the top ten local companies based on market capitalization plummeted in the past ten years, while the rates for 60, 70, and 80-somethings increased during the same period
For instance, of 66,799 Samsung Electronics shareholders (as of the end of 2016), 20-somethings accounted for 2.77 percent and 30-somethings for 10.79 percent, while 15.96 percent were in their 60s, 8.06 percent in their 70s, and 2.4 percent in their 80s and above. Those in their 40s and 50s had the highest percentages at 24.93 percent and 23.51 percent, respectively.
However, compared to 2006, the numbers were a drop for 20 (5.41 to 2.77 percent), 30 (25.68 to 10.79 percent), and 40-somethings (27.72 to 24.93 percent), whereas they increased for 50 (19.83 to 23.51 percent), 60 (10.63 to 15.96 percent), 70 (3.65 to 8.06 percent), and 80-somethings and older (1.01 to 2.4 percent).
Similarly, Naver, currently ranking sixth in terms of market capitalization, saw its percentage of investors in their 30s drop from 28.49 percent in 2006 to 18.08 by the end of 2016, and 20s, from 9.14 to 3.77 percent. During the same period, rates for 60-somethings (9.7 to 12.45 percent), 70-somethings (3.12 to 5.88 percent), and 80-somethings and above (0.67 to 1.4 percent) all saw a noticeable increase.
SEIBro officials noted that similar patterns are observed at other big name corporations in Korea that are seeing more older shareholders but fewer younger investors, adding that the local stock market is stagnating in terms of its inflow of new investors, namely the youth.
“With the KOSPI fluctuating within the same boundaries for years, few young investors reaped profits from stock trading,” an official said, noting that older investors, in contrast, made significant profits in the past during Korea’s rapid economic development.
“The high youth unemployment rate and the subsequent poor wages may be a factor, but even among those with decent enough income, the market just isn’t attractive enough.”
By Joseph Shin (email@example.com)