Overseas media are also taking note of a South Korean market trend in which retail investors are pulling money from deposits and savings-type insurance to buy large semiconductor stocks.

On May 19 (local time), blockchain media outlet BeInCrypto reported that domestic funds are moving from safe assets into the stock market and concentrating on SK hynix and Samsung Electronics. With expectations growing for stronger demand for AI semiconductors and the two stocks nearing record-high territory, it said retail investors' risk appetite is rising sharply.

According to the outlet, savings bank deposit balances have fallen below 100 trillion won for the first time in 4 years. Term deposits at commercial banks have also dropped by about 12 trillion won since February. It said this means money that had stayed in deposits and insurance is moving into the stock market.

It also pointed to a notable increase in aggressive investing by older investors. Based on major local brokerages, investors aged 50 and above account for about 62 percent of total margin loans, and margin loan balances held by investors in their 60s surged in a year to around 8 trillion won from 3.9 trillion won. BeInCrypto said buying is rising quickly not only through cash investment but also through the use of leverage.

Insurance outflows are also continuing. The volume of insurance cancellations at the country’s top 3 life insurers rose 16 percent in the first quarter of this year, and cancellations of savings-type insurance increased 23 percent. It said a growing number of people are cancelling long-term financial products and using the money to fund stock investment.

The money is effectively concentrating on SK hynix and Samsung Electronics. Their combined share of KOSPI market capitalisation rose to about 42 percent after the AI rally. Citing TradingView data, BeInCrypto said SK hynix has climbed about 265 percent since November last year, and Samsung Electronics has risen 162 percent.

This concentration has also overlapped with government support policies. The government recently expanded support for the semiconductor industry to around 33 trillion won. It said expectations of higher AI memory demand, policy support and retail inflows have together formed a structure that funnels into large semiconductor stocks.

The overseas outlet, however, also pointed to risks in the current trend. Crypto Rover, an analyst and YouTuber, said, "Marginal buyers are cancelling insurance, withdrawing deposits and even using margin trading to jump on the rally." That means that as expectations for gains rise, funding methods for investment are becoming more aggressive.

Loss burdens have also been seen during periods of volatility. When the KOSPI at one point fell 19 percent in March, the average loss rate for older investors using leverage was found to be about 20 percent. It shows that the recent shift in funds is not just an expansion of buying but is leading to investment expansion accompanied by debt.

Risk appetite is also spreading to the cryptocurrency market. The share of won-denominated trading on Upbit and Bithumb was estimated at about 30 percent of global spot cryptocurrency trading volume. It said South Korean retail investors’ aggressive investment tendency is expanding across both stock and virtual asset markets.

Technical indicators are also sending overheating signals. The weekly RSI (relative strength index) for SK hynix and Samsung Electronics both rose above 80, entering overbought territory. The market sees the upcoming earnings season as a turning point for judging whether the current semiconductor rally and leveraged buying can continue.