"Let Me Make Some Money Too"... In the 5,000-Point KOSPI Era, Debt-Fueled Investing Hits Record 30 Trillion Won

[Financial News] As the domestic stock market surges, the scale of so-called "debt-fueled investing"—borrowing money to invest—has surpassed 30 trillion won for the first time on record.
The Korea Financial Investment Association (KOFIA) announced on the 4th that, as of the 2nd, outstanding margin loans stood at 30.4731 trillion won. That represents an increase of nearly 11.7% since the beginning of the year.
This figure refers to the amount investors have borrowed from securities firms to buy stocks and have yet to repay. It is the first time this indicator has exceeded 30 trillion won. The balance has roughly doubled compared with early January last year, when it was 15.5823 trillion won.
By market, 20.0982 trillion won was concentrated in the Korea Composite Stock Price Index (KOSPI), and 10.3749 trillion won in KOSDAQ. The balance of securities-backed loans, which are stock-collateralized loans, also climbed from the 19 trillion-won range to the 26 trillion-won range over the same period.
Analysts see this as a result of growing FOMO—fear of missing out—among retail investors amid the stock market rally.
By individual stock, borrowing has been heavily concentrated in large-cap names that have risen sharply. Samsung Electronics had the largest margin balance at around 1.8 trillion won, followed by SK hynix at about 1.3 trillion won and Hyundai Motor at 400 billion won.
In margin trading, investors add borrowed funds to their own capital to purchase stocks. The more investors expect prices to rise and chase the rally, the larger the volume of such trades tends to become.
The rapid expansion of debt-fueled investing is also raising concerns about increased market volatility.
While borrowing to invest can amplify returns in a rising market, it also carries significant loss risk when the market corrects, including forced liquidations. Observers warn against excessive use of leverage.
As their margin-lending limits have been reached, some securities firms, including Korea Investment & Securities and NH Investment & Securities, have temporarily halted new margin loans.
KB Securities has temporarily restricted margin-buy orders since the 3rd, so investors with more than 500 million won in margin balances cannot make additional margin purchases. Korea Investment & Securities also temporarily suspended its securities-backed loan service on the same day after exhausting its margin-lending capacity.
New loans backed by stocks, investment funds, ELS products, and bonds have been suspended. However, existing loans can be rolled over at maturity if certain conditions are met. New margin purchases and sell-collateralized loans are still allowed.

Meanwhile, on the 4th, the KOSPI closed at 5,371.10, up 83.02 points, or 1.57%, from the previous trading day.

hsg@fnnews.com Han Seung-gon Reporter