Stock loans in Korea have nearly doubled over the past two years as more retail investors borrow money to invest in equities amid a market rally, data showed on March 6.
The amount of outstanding margin loans came to 11.23 trillion won (US$10.40 billion) as of March 2, up about 14 percent from the end of last year, according to the data compiled by the Korea Financial Investment Association.
The figure is 1.7 times the 6.78 trillion won recorded two years earlier. Investors, mostly individuals, take out loans from brokerage houses to invest in stocks.
The country’s stock market has been on a roll since last year, driven by robust corporate earnings and economic fundamentals.
Since October, the margin debt has been on a steady rise as a growing number of retail investors bet that the local stock market will rise further down the road.
The benchmark KOSPI spiked more than 21 percent last year, hitting an all-time high of 2,561.63 on Nov. 2, with the secondary, tech-laden KOSDAQ market enjoying a 26.4 percent surge.
By Song Seung-hyun and newswires (firstname.lastname@example.org