Credit trading balance decreases... The lending investment boom temporarily cools down

Recently, the “debt investment” boom has cooled down, and the balance of margin trading has shown a downward trend. This is due to some securities firms exhausting their credit limits and suspending new margin financing.

According to data from the Financial Investment Association, as of the 9th, the margin trading financing balance was 31.6905 trillion KRW, down from the peak of 33.6945 trillion KRW on the 5th by about 2 trillion KRW. This decline follows a pattern where, after a 1 trillion KRW decrease on the 6th, there have been two consecutive trading days each decreasing by 1 trillion KRW. Although geopolitical tensions in Iran have added volatility to the stock market, the overall scale of debt investment continues to shrink.

The main reason for the decrease in margin trading balances is that Korea Investment & Securities (since the 4th) and NH Investment & Securities (since the 5th) have suspended new margin financing. This move is seen as a natural measure due to securities firms reaching their credit limits.

Additionally, the amount of unsettled funds from ultra-short-term borrowing used for investment has also significantly decreased. As of the 9th, unsettled funds totaled 1.3303 trillion KRW, a reduction of over 700 billion KRW from the previous day. This decrease in unsettled funds has also reduced the number of stocks subject to forced liquidation, thereby enhancing market stability.

Although margin trading financing and unsettled funds have begun to decline, experts believe this is a temporary phenomenon. While increased regulation by securities firms has led to a reduction in debt investments, the market still maintains strong expectations for stock price increases. Therefore, the possibility of debt investment rising again in the future cannot be ruled out. How to balance market volatility with optimistic sentiment will be a key focus for future stock market developments.