SEOUL, October 30 (AJP) — South Koreans are taking on more debt to invest in stocks, as a wave of market optimism drives both leveraged trading and record cash holdings at brokerages.
Margin loans — money borrowed from securities firms to buy shares — climbed above 25 trillion won ($18.1 billion) for the first time, reaching 25.1 trillion won as of Thursday, according to data from the Korea Financial Investment Association. That represents an 8 percent increase from 23.3 trillion won on Oct. 2, underscoring the growing appetite for risk among retail investors betting on further market gains.
Investor deposits, which track the total balance of cash held in brokerage accounts, also hit a record 85.9 trillion won ($62.3 billion), up more than 5 trillion won in just over two weeks. The indicator, often seen as a barometer of investor confidence and buying power, has been climbing steadily this year.
The surge in both deposits and margin borrowing comes as South Korea’s KOSPI index has rallied in recent weeks on expectations of interest rate cuts and stronger corporate earnings.
Analysts warn, however, that the increased use of leverage could amplify volatility if market sentiment shifts, a lesson the country’s retail-heavy market has learned in past boom-and-bust cycles.
* This article, published by Economic Daily, was translated by AI and edited by AJP.
Copyright ⓒ Aju Press All rights reserved.
