South Korean retail investors increase leverage as stock market reaches new highs

Huo Xing Finance reports that on June 1, the booming Korean stock market drove a surge in personal borrowing. As the KOSPI index continued to hit new records, retail investors in Korea became increasingly eager to borrow money to invest in the market. By last Thursday, the total outstanding balance of personal loans from Korea’s five largest banks reached 106.99 trillion KRW, approximately $70.98 billion, the highest level since November 2023 (when it stood at 107.72 trillion KRW), with a monthly increase of 2.65 trillion KRW—the largest monthly rise since April 2021. This borrowing surge was primarily driven by overdraft credit lines, whose outstanding balance has reached 41.93 trillion KRW. The sustained rally in the Korean stock market has fueled retail investors’ demand for leveraged investments, leading to a rapid rebound in personal borrowing. According to market data, today both the Korean and Japanese stock markets hit new highs: the KOSPI index surged 3% intraday to 8,733.67 points, while the Nikkei 225 surpassed 67,000 points, setting another all-time high with a 1% intraday gain.