Margin Debt and Short-Sale Borrowing Hit Records as Korea Market Risk Builds

As South Korea’s stock market continues to rise, both margin-loan balances, often described as debt-fueled investing, and stock-borrowing balances used as short-selling standby funds have reached record highs. Hankyung reported that margin loans stood at 32.8 trillion won, the largest on record, while unpaid brokerage purchase balances were also in the 1 trillion won range. With the Kospi approaching the 6,000 mark, stock-borrowing balances were also tallied at an all-time high. Such borrowing is mainly used by foreign and institutional investors for short selling when they expect share prices to fall. The rise in leveraged retail investing may increase concerns over forced selling if the market turns volatile. Source: hankyung.com