Individual investors increased margin trading in Samsung Electronics and SK Hynix during a one-month period ending on the 21st of this month, even as the broader Korean stock market underwent deleveraging. According to data from KOSCOM, credit balances for SK Hynix rose 707.5 billion won to 5.16 trillion won, while Samsung Electronics saw an increase of 197.2 billion won to 5.06 trillion won, representing a combined inflow of 904.7 billion won into the two semiconductor stocks. Investors viewed the price correction as a buying opportunity, betting on a rebound despite significant stock price declines of 33.57% for SK Hynix and 26.84% for Samsung Electronics during the same period. This concentration in semiconductor stocks occurred against a backdrop of overall KOSPI credit balance declining 2.93 trillion won from 28.86 trillion won to 25.93 trillion won, as the index fell 26% amid forced liquidations and voluntary deleveraging across the broader market.
KOSPI Credit Balance Declines 2.93 Trillion Won Amid Market Correction
The total credit trading balance for the KOSPI market decreased from 28.86 trillion won on the 22nd of last month to 25.93 trillion won on the 21st of this month, a reduction of 2.93 trillion won, according to KOSCOM data based on settlement dates. During the same period, the KOSPI index fell from 9114.55 to 6747.95, a 26% decline. The sharp market drop triggered both forced sell-offs due to insufficient collateral and voluntary credit repayments by investors.
Semiconductor Stocks Capture 904.7 Billion Won in New Margin Credit
In contrast to the broader market trend, credit balances in major semiconductor stocks increased substantially. SK Hynix's credit balance grew by 707.5 billion won over the month to reach 5.16 trillion won, while Samsung Electronics recorded an increase of 197.2 billion won to 5.06 trillion won. The two stocks alone attracted a total of 904.7 billion won in new credit funds. Including SK Square, SK Hynix's parent company, which saw a net increase of 119.4 billion won, the three semiconductor-related stocks received a combined 1.02 trillion won in margin credit.
The credit balance increases are distinct from simple valuation changes, as they occurred despite significant stock price declines. SK Hynix shares fell 33.57% during the period, while Samsung Electronics and SK Square dropped 26.84% and 29.61% respectively. The rising credit balances amid falling stock prices indicate that new margin purchases exceeded repayments, even as existing positions lost value.
Concentration in Two Stocks Rises to 39.4% of Total KOSPI Credit
The concentration of credit funds in semiconductor stocks became more pronounced during the period. The combined share of Samsung Electronics and SK Hynix in total KOSPI credit balances increased from 32.3% to 39.4%, a rise of 7.1 percentage points over one month. Credit balances for all other KOSPI stocks decreased by 3.82 trillion won during the same period. This pattern shows individual investors' margin funds flowing specifically into semiconductor large-caps while the overall market entered a deleveraging phase.
Investors appear to have interpreted the price decline as excessive given solid expectations for semiconductor earnings. The assessment that memory demand growth and earnings improvement prospects driven by artificial intelligence investment expansion remain intact led investors to view the price correction as a buying opportunity.
JP Morgan Attributes Correction to Liquidity Shock Rather Than Structural Issues
JP Morgan recently interpreted the sharp decline in the Korean stock market as an adjustment driven by liquidity shocks rather than structural deterioration in corporate earnings. In a report published on the 21st (local time), JP Morgan analyzed that the Korean market's decline was amplified by rapid position unwinding among leveraged exchange-traded funds, hedge funds, and foreign investors.
FAQ
How much did margin credit increase in Samsung Electronics and SK Hynix during the market correction?
SK Hynix's credit balance increased 707.5 billion won to 5.16 trillion won, and Samsung Electronics' credit balance rose 197.2 billion won to 5.06 trillion won during the one-month period ending on the 21st of this month, representing a combined inflow of 904.7 billion won into the two semiconductor stocks.
What was the change in overall KOSPI credit balance during the same period?
The total KOSPI credit trading balance decreased from 28.86 trillion won on the 22nd of last month to 25.93 trillion won on the 21st of this month, a reduction of 2.93 trillion won, while the KOSPI index fell 26% from 9114.55 to 6747.95.
What share of total KOSPI credit do Samsung Electronics and SK Hynix now represent?
The combined share of Samsung Electronics and SK Hynix in total KOSPI credit balances increased from 32.3% to 39.4% over the one-month period, a rise of 7.1 percentage points, while credit balances for all other KOSPI stocks decreased by 3.82 trillion won.
