Deposits at cash management accounts rose to a record high this week, as investors stayed on the sidelines over a lackluster performance in stock markets, data showed Wednesday.
A cash management account refers to a type of account offered by brokerage houses and other financial institutions that allows an account holder to trade equities while earning interest on cash balances.
The net asset value of cash management accounts reached 53.1 trillion won ($45.5 billion) as of Tuesday, up 500 billion won from a previous record high, according to data compiled by the Korea Financial Investment Association (KFIA).
An official at the KFIA said investors prefer parking their money in short-term investment vehicles as the stock markets have traded in a narrow range over a sluggish economy and other external factors.
While cash management accounts drew a record amount of funds, investors would probably shun buying risky assets for the time being, some analysts said.
Jang Hwa-tak, an analyst at Dongbu Securities, said, "Floating money is heading for cash management accounts, but it is unlikely to lead to a rise in asset prices." (Yonhap)
