▲ The closing prices for the KOSPI, SK Hynix, and Samsung Electronics are displayed on the electronic board at the dealing room of Woori Bank headquarters in Jung-gu, Seoul, on the 15th. On this day, the KOSPI closed down 454.59 points (7.57%) from the previous trading day at 5,554.22. (Photo: Yonhap News)
Following the previous day, forced liquidations reached the KRW 80 billion range once again yesterday (the 15th) as the KOSPI plummeted by more than 7%.
According to the Korea Financial Investment Association on the 16th, the actual forced liquidation amount relative to brokerage margin receivables was tallied at KRW 80.4 billion on October 15.
This marks the second consecutive day in the KRW 80 billion range, following the KRW 89.3 billion recorded on the 14th, which was the highest since July 31 when it hit KRW 122 billion.
Forced liquidation refers to the scale of compulsory sell-offs that occur in stock trading due to a shortage of margin.
When an investor fails to repay money borrowed from a securities firm or if the value of stocks deposited as collateral falls below a certain threshold, the securities firm forcibly sells the held stocks without the investor's consent to recover the debt.
The fact that forced liquidations reached the KRW 80 billion range for two straight days signifies that investors' losses have surged due to the sharp market downturn.
Investor deposits, which act as standby funds for the stock market, continued their downward trend.
Investor deposits stood at KRW 96.9121 trillion on October 15, down 0.5% from KRW 97.4280 trillion the previous day.
Investor deposits have maintained a downward trend for three consecutive trading sessions since hitting KRW 100.4389 trillion on the 12th.
The balance of credit transactions for stock purchases, a key indicator of debt-financed investing, recorded KRW 32.7499 trillion, dropping back into the KRW 32 trillion range for the first time in about half a month since September 29.
The KOSPI declined for seven straight trading sessions starting from the 6th, plunging 7.57% on October 15 to finish at 5,554.22 based on the closing price.
Reflecting a technical rebound from the previous day's steep drop, the index bounced back on the 16th for the first time in eight trading sessions, closing 2.05% higher at 5,668.05.
(Photo: Yonhap News)
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