South Korean brokerages’ CP balances fall 22.4% as July forced liquidations hit record

  • South Korean brokerages recorded record forced liquidations as leveraged retail trading met a July market correction.
  • July liquidations averaged 2,258 accounts and ₩43.87 billion daily, up 13-fold in value year-on-year.
  • Individual professional investors reached 26,282 by July-end, while CP balances fell amid weaker trading and higher rates.

South Korean brokerages faced tighter short-term funding conditions and sharply rising retail-trading risks as outstanding commercial paper (CP) and electronic short-term bonds fell to ₩78.7726 trillion. Issuance of ₩31.1371 trillion against ₩45.2752 trillion of maturities produced ₩14.1381 trillion in net redemptions, as weaker trading and higher short-term rates reduced liquidity needs. At 10 brokerages, forced liquidations averaged 2,258 accounts and ₩43.87 billion ($31.7 million) a day in July, up 3.6-fold in accounts and 13-fold in value from a year earlier. July was the highest level since the series began in 2022. Registered individual professional investors rose 16.8% to 26,282 by the end of July, with 11,173 new registrations during the first seven months. The increase has expanded access to high-risk products such as contracts for difference, prompting Rep. Park Sung-hoon of the People Power Party to call for stronger safeguards against forced selling and cascading losses.

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