Investors in South Korea are scrambling to withdraw their money from short-term investment vehicles amid a recent stock market rally, data showed Sunday.
Money market funds (MMFs) here had a combined 106.3 trillion won (US$94 billion) under their management as of Tuesday, according to the data from the Korea Financial Investment Association.
The withdrawals represent a 23 percent tumble -- worth 31.7 trillion won -- from an all-time high recorded May 17 this year amid high political uncertainties.
In particular, corporate deposits at MMFs tumbled 27 percent to 80.1 trillion won over the cited period, the data showed.
MMFs usually invest in short-term debt securities, such as Treasury bills and commercial papers, which are considered as safe as bank deposits but have a relatively quick and high return.
The sharp capital outflow from MMFs is seen as pointing to improved investor sentiment.
"The nosedive in corporate deposits is an indication that companies are increasing their investment on the back of a global economic recovery," said Hwang Se-woon, a senior researcher at the Korea Capital Market Institute. "It could lead to a recovery in business conditions and investor sentiment."
The tally comes amid the recent bull run of the stock market. Driven by strong foreign buying, the benchmark Korea Composite Stock Price Index (KOSPI) rose for five consecutive sessions to hit a record high of 2,474.76 Thursday before edging lower Friday. (Yonhap)
Kim Jung-mi firstname.lastname@example.org