The KOSPI is approaching the 7,000 mark after a sharp semiconductor-led rally, yet the recovery is offering little relief to South Korea’s brokerage industry. The index closed at 6,995.39 on the previous trading day, up 308.18 points, or 4.61%, from the prior session, according to the Korea Exchange on the 8th. Foreign investors bought a net 2.5862 trillion won on the main board and institutions purchased 2.6415 trillion won, while individual investors sold a net 6.8292 trillion won, their second-largest net selling total on record. Brokerage earnings expectations are weakening as domestic-market trading has contracted since July. FnGuide’s consensus for third-quarter operating profit across the securities sector is 2.1862 trillion won, down 14.96% over the past month. The downgrade reflects expectations of slower growth in brokerage operations, which had benefited from the market rally and increased trading volumes that began in the second half of last year. Greater market volatility has also increased fluctuations in proprietary-trading results, where firms invest their own capital in stocks and bonds. Investor deposits, or cash held in brokerage accounts awaiting investment, fell to 93.5499 trillion won as of the 4th, down 4.2115 trillion won from the previous trading day and their lowest level since 91.2181 trillion won was recorded on January 16. The decline exceeded 4 trillion won even though individual investors sold a net 3.7225 trillion won on the main board, suggesting that some sale proceeds left brokerage accounts. Analysts say retail sentiment has weakened as the KOSPI spent more time below 7,000, and it remains uncertain whether the latest rebound will revive trading or bring individual investors back. At the same time, margin loans, which finance stock purchases with borrowed money, rose to 33.5958 trillion won as of the 4th, increasing 53.7 billion won on the day and climbing for a fourth consecutive session. The balance reached its highest level since 34.3701 trillion won on July 15. Unsettled trades, another form of very short-term leveraged investing, rose 61.2 billion won to 1.0519 trillion won. Volatility also picked up, with the KOSPI 200 Volatility Index, or VKOSPI (an index tracking expected market volatility), rising 8.49% to 42.67 on the 7th. VKOSPI had reached 58.03 on the 21st of last month, eased to 39.33 on the 4th of this month and then rebounded as the KOSPI gained more than 4%.