The minister said rising leveraged equity bets are a concern and pledged action against any herd behavior in financial markets, while pointing to foreign investors’ portfolio shifts as one source of stock volatility.
South Korea’s finance minister said on June 4 that the government is concerned about a rise in leveraged stock investment and will respond to any herd behavior in financial markets. The minister also said portfolio adjustments by foreign investors are one factor behind volatility in South Korea’s stock market. The remarks point to official concern that borrowed or amplified equity exposure can magnify swings when sentiment turns, especially if overseas flows are also shifting.