SEOUL - Leveraged stock investments by South Korean retail investors have hit strict borrowing caps at local brokerage firms, signaling intense demand amid a historic market rally. Kim Sei-wan, president of the Korea Capital Market Institute, confirmed that individual investors can no longer borrow additional funds for equity positions.
The benchmark KOSPI index has surged 83 percent year-to-date, emerging as the world’s top-performing market. This growth is largely propelled by artificial intelligence-driven enthusiasm, with capital flowing heavily into domestic semiconductor giants Samsung Electronics and SK Hynix.
Retail participation has become the primary engine of this rally. Individual investors have poured 79 trillion won ($51.8 billion) into the KOSPI so far this year. This aggressive buying has offset significant selling pressure from foreign entities, who have offloaded 124 trillion won in shares to lock in profits.
Data from the Korea Financial Investment Association highlights the scale of leverage involved. Borrowed investments by retail traders reached a record 29 trillion won as of Tuesday, marking a 71 percent increase from the end of last year. The saturation of these credit lines suggests that retail momentum may face immediate structural constraints.