Even as global markets rally, Korean retail investors—known as "seohak ant"—are showing little interest in returning to domestic stocks. The expected boost from their comeback appears muted, raising questions about the effectiveness of recent policy incentives.
According to industry data, the net outflow from Korean equities by individual investors has continued despite the KOSPI's recent gains. Many have shifted focus to overseas markets, particularly U.S. stocks, drawn by stronger returns and tax benefits.
Financial authorities had hoped that a recovery in domestic markets would lure back these investors, especially with the launch of the "Domestic Market Return Account" offering tax advantages. However, early indicators suggest the impact is limited.
“The tax incentives alone may not be enough to reverse the trend,” noted an analyst. “Investors have become accustomed to the higher liquidity and broader opportunities in overseas markets.”
Meanwhile, foreign investors have been net buyers of Korean stocks, reflecting a divergence in sentiment between local and international players. The won-dollar exchange rate stability has also been a factor supporting foreign inflows.
As the second half of the year approaches, policymakers are under pressure to find additional measures to revitalize the domestic stock market and encourage retail participation.