South Korea forced selling hits 43.87 billion won as leverage unwinds

  • South Korea's individual professional investor population reached 26,282 by the end of July.
  • July forced selling averaged 43.87 billion won across 2,258 accounts each day.
  • Registrations rose 16.8% from 22,495 at the end of last year.

South Korea's registered individual professional investors increased 16.8% to 26,282 by the end of July, up 3,787 from 22,495 at the end of last year. The rise accelerated as the KOSPI climbed through 7,000, 8,000 and 9,000 in May and June, encouraging retail investors to shift money from bank deposits into stocks and pursue higher-risk products. Leverage expanded alongside the rally, with forced selling at 10 domestic brokerages reaching an average 43.87 billion won a day across 2,258 accounts in July. That was up 114.9% from June, and 13-fold in value from July last year, when the daily average was 3.38 billion won. The increase followed a sharp correction linked to global semiconductor stocks and highlighted the losses that can emerge when borrowed-money positions face falling collateral values. Rep. Park Sung-hoon of the People Power Party said financial authorities should strengthen investor protection and prevent the individual professional investor designation from being used to bypass safeguards for high-risk products.

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