Mirae Asset Capital Launches Korea's First Overseas Stock Loan Service

by Song Hwajung

Published 29 Mar.2021 14:18(KST)

[Asia Economy Reporter Song Hwajeong] Mirae Asset Capital announced on the 29th that it has launched the country's first overseas stock stock loan service.

Until now, the industry has operated stock loans only in the domestic stock market, but Mirae Asset Capital has expanded the service area of stock loans to overseas markets. Stock loans provide loan services under more favorable conditions to investors compared to securities firms' margin or credit transactions.

Overseas stock investors had no choice but to use securities firms' margin transactions to gain leverage effects. Margin transactions require repayment within a short period, exposing investors who use them to risks from all-in investments aiming for short-term capital gains.

The newly launched overseas stock stock loan (M-Global Stock Loan) allows the purchase of individual stocks listed in major overseas markets such as the United States, China, and Hong Kong, as well as exchange-traded funds (ETFs) that provide diversification effects. The loan limit can be up to 150% of the evaluated value using the applicant's assets as collateral, and the loan can be maintained for up to 3 years, allowing more stable profit and loss management compared to margin transactions that require short-term repayment. Currently, it is only available through Mirae Asset Securities accounts, but the number of available securities firms is expected to gradually expand.

A representative from Mirae Asset Capital said, “The overseas stock stock loan is expected to be a good tool for investors as it enables medium- to long-term diversified investment using global blue-chip stocks and ETFs. In particular, it can compensate for the drawbacks of margin transactions that require short-term investments within 2 to 3 days, so if used appropriately, it can aim for stable investment profit expansion.”