▷[Fear of Forced Liquidation Becomes Reality] With 64 Trillion Won in Margin Trading, Retail Investors Suffer Amid Unprecedented Market Volatility
- As the domestic stock market experiences a sharp decline, concerns over forced liquidation are rapidly increasing.
- Recent official statistics indicate that the amount of forced liquidations from margin trading has reached 305.3 billion won in the last two counts, and when considering the historically high balance of "margin trading" (investing with borrowed money), the actual pressure for forced liquidation in the market may be significantly greater than the statistics suggest.
- According to the Korea Financial Investment Association, as of June 7-8, the actual amount of forced liquidation compared to margin trading balances was recorded at 305.3 billion won.
- The proportion of forced liquidation compared to margin balances was notably higher than usual, recording 9.1% on June 5 and 8.2% on June 8, compared to the typical range of 1-2%.
- The total amount of credit financing piled up in the domestic stock market is at a historical peak. As of June 8, the total balance of credit trading financing was 37.779 trillion won.
- Of this, the KOSPI market accounted for 28.3265 trillion won, while the KOSDAQ market accounted for 9.4639 trillion won. On the same day, the balance of collateralized securities financing also reached 26.5509 trillion won. Adding these figures brings the total margin trading amount to a record high of 64.3413 trillion won.
◆Major Reports: Interest Rates Create Opportunities, Spreads Generate Profits [iM Securities]
- Credit spreads remain stable, but the potential for rising interest rates poses a variable.
- Both ultra-high-grade bonds (government and bank bonds) and high-grade bonds (corporate bonds) have returned to issuance levels in line with historical averages.
- Government bonds are primarily issued for social overhead capital, while mortgage-backed securities are being redeemed.
- Bank bonds show a differentiation between special bank bond issuances and general bank bond redemptions.
- As interest rate volatility increases, the issuance of floating-rate notes (FRNs) has surged.
- Corporate bond issuance has slowed, with companies diversifying their funding through loans and short-term financing.
- Supply pressures are not significant, limiting upward pressure on spreads.
- However, uncertainty remains regarding potential supply increases in the second half of the year.
◆Key Announcements After Market Close (June 9)
▷Hanssem decided to enter into a trust agreement for the acquisition of its own shares worth approximately 50 billion won with Shinhan Investment Corp.
▷KC Cottrell announced the release of 91,157,556 common shares held by KC Green Holdings from mandatory holding (escrow) on June 12.
▷Meta Labs decided to acquire 4,878,049 shares of Metacare in cash to strengthen responsible management as the largest shareholder (through a third-party allocation of new shares).
▷Pearl Abyss decided to retire its own shares worth approximately 17.3 billion won.
▷Medytox decided to acquire 64,350 shares of its own common stock.
◆Fund Trends (as of June 9, excluding ETFs)
▷Domestic Equity: 184.7 billion won
▷Overseas Equity: -29.4 billion won
◆Today's Key Schedule (June 10)
▷United States: Consumer Price Index (May)
▷China: Consumer Price Index (May), Producer Price Index (May)
* This article has been translated by AI.
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