South Korean Households See Excess Funds Rise Amid Income Growth, Tighter Lending

Net financial funds -- the difference between financial assets and financial liabilities -- held by households and nonprofit organizations reached 58 trillion won (US$40 billion) in the third quarter, up from 51.3 trillion won in the previous quarter, according to preliminary data from the Bank of Korea (BOK).

Excess funds refer to the amount of money that remains on household balance sheets after funds are allocated to deposits, stock investments and other financial assets, reports Yonhap news agency.

In detail, fund investment increased by 1.9 trillion won on-quarter to 78.8 trillion won in the third quarter, while fundraising fell from 25.6 trillion won to 20.7 trillion won.

"Fund investment, including deposits with financial institutions, has increased, as income growth outpaced spending. The government's stimulus last year also contributed to the rise in income," BOK official Kim Yong-hyun told a press briefing.

"But borrowing declined as the government tightened lending regulations in response to rising home prices," he added.

Nonfinancial corporations raised 19.5 trillion won in net funds during the third quarter, up sharply from the previous quarter's 3.5 trillion won, while the government recorded net lending of 5.9 trillion won, shifting from net borrowing of 2.7 trillion won in the previous quarter, the data showed.

Meanwhile, Seoul shares extended gains late on Thursday, extending a record-setting rally, as investors bolstered technology stocks following a record quarterly earnings estimate released by Samsung Electronics.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 47.96 points, or 1.05 percent, to 4,599.02 as of 11:20 a.m.

The KOSPI briefly topped the 4,600-point mark for a second straight day, touching an intraday high of 4,610.93 and raising the possibility of a close above 4,600 later in the session.

A day earlier, the index rose 0.57 percent to close at an all-time high of 4,551.06 after hitting an intraday high of 4,611.72.

Overnight, U.S. stocks ended mixed. The Dow Jones Industrial Average fell 0.94 percent, while the tech-heavy Nasdaq composite rose 0.16 percent.

Retail investors bought a net 356.96 billion won (US$246 million) worth of stocks, offsetting the net selling by institutions and foreigners of 361.17 billion won and 100.23 billion won, respectively.

Tech, defence and shipbuilding stocks led the gains.

- IANS