[Financial News] SK Hynix and Samsung Electronics plunged around 10% in a single day on the 13th, and the value of shares forcibly sold from the accounts of investors who had borrowed money to buy stocks reached its highest level in more than two months. The share of unpaid balances owed to securities firms that were settled through forced sales more than doubled in a single day. The problem is that the KOSPI’s losses widened further as the market opened on the 15th. Forced liquidations among individual investors who used leverage to borrow and invest are expected to snowball. “Forced selling” more than doubles in a single day According to the Korea Financial Investment Association on the 14th, forced sales accounted for 5.6% of outstanding unsettled balances from securities transactions the previous day. That was the highest level since July 31 (7.1%) and more than double the 2.7% recorded on the 12th, a day earlier. The actual amount of forced sales was 59.35 billion won, the highest since 122.01 billion won on July 31. Forced selling refers to a securities firm’s compulsory liquidation of shares in an account that does not have enough margin. If an investor cannot repay money borrowed from a securities firm, or the value of shares pledged as collateral falls below a certain threshold, the firm sells the shares held in the account without the investor’s consent to recover the money it lent. Forced sales surged because the sharp market decline caused collateral values to fall all at once. The KOSPI fell 5.46% from the previous trading day’s close. During the session, it slid as low as 5,911.11, falling below the 6,000 mark for the first time in about two and a half months, since July 31 (when the intraday low was 5,629.76). SK Hynix and Samsung Electronics, the two leading stocks in the domestic market, plunged 10.09% and 7.39%, respectively. The scale of “debt-financed investing” remains large. The balance of margin loans, a key indicator of such investing, stood at 34.2529 trillion won, close to the 34.2887 trillion won recorded on the 12th—the highest level since July 15 (34.3701 trillion won). This means that if the stock market falls further, the volume of forced sales could increase. KOSPI plunges ... SK Hynix tumbles more than 10% Meanwhile, the KOSPI fell to the 5,600 level in just one day. According to the Korea Exchange on the 15th, the KOSPI opened at 5,673.01, down 335.8 points (5.59%) from the previous day’s close of 6,008.81. The KOSDAQ opened at 784.45, down 39.4 points (4.79%) from the previous trading day’s close of 823.88. SK Hynix has also been plunging since early trading. As of 9:54 a.m. that day, its shares were trading at 1,275,000 won, down 10.15% from the previous trading day. The decline is attributed to growing pressure for tighter monetary policy amid a U.S. Consumer Price Index (CPI) reading for September that exceeded market expectations, as well as deteriorating investor sentiment after tech stocks plunged on the New York market overnight. In New York, concerns about financial soundness arose after AI cloud company CoreWeave moved to take on substantial debt to expand infrastructure, including data centers, triggering a series of sell-offs centered on technology and semiconductor stocks. Han Ji-young, a researcher at Kiwoom Securities, said, “The impact of stronger selling pressure across the AI value chain in the U.S. was significant. Domestic stocks also opened lower in the wake of a simultaneous plunge in AI infrastructure stocks. However, I expect the losses to narrow as the market digests the possibility of technical buying after seven consecutive trading days of sharp declines and the TSMC earnings announcement later in the session.” [email protected] Kim Hee-seon Reporter