Ahead of Value-Up Announcement... Debt Investment Surpasses 18 Trillion Won in One Month

Margin Loan Balance Increases by 8%
Automobile and Financial Stocks, Known for Low PBR, Rise

The balance of margin loans, where investors borrow money from securities firms to buy stocks, has exceeded 18 trillion won in just one month. In particular, expectations for the corporate value-up program set to be unveiled next week have led to a significant increase in margin loan balances for automobile and financial stocks, which are classified as low price-to-book ratio (PBR) stocks.

According to the financial investment industry on the 22nd, the amount of margin loans was recorded at 18.1947 trillion won as of the 20th. Margin loans exceeded 18 trillion won in mid-January from 17.537 trillion won at the beginning of the year (January 2), then decreased again to 17.56 trillion won in early February as the KOSPI continued to decline. Recently, after the government announced the introduction of the corporate value-up program, demand concentrated on stocks with a PBR below 1, pushing the balance back over 18 trillion won.

The size of margin loans increased in both the KOSPI and KOSDAQ markets. As of the 20th, the margin loan balance in the KOSPI market was 9.7599 trillion won, an increase of about 740 billion won (7.6%) compared to 9.02 trillion won at the beginning of the year.

The margin loan balance in the KOSDAQ market, which had been less overheated than the KOSPI market, is also on the rise recently. The KOSDAQ margin loan amount decreased from 8.5 trillion won at the beginning of the year to 8.1 trillion won in early February as KOSDAQ declined, but increased to 8.4348 trillion won as of the 20th.

The margin loan balance refers to the amount investors have borrowed from securities firms to buy stocks and have not yet repaid. Margin loans typically increase when there is strong demand from investors willing to borrow money in anticipation of stock price rises. Recently, as low PBR stocks and some KOSDAQ stocks have risen sharply in a short period, the number of investors borrowing money has increased.

Since the beginning of the year, the stock market, which had been range-bound, has seen demand concentrate on low PBR stocks following the government's announcement of the corporate value-up program, with the index recovering from below 2,500 to maintaining around 2,650. The KOSDAQ, which had been neglected for some time, recently recovered to 860, fueling optimism that after KOSPI, it is now KOSDAQ's turn.

Outstanding unsettled balances from entrusted trading have also increased. From the 15th to the 19th, it exceeded 1 trillion won for three consecutive trading days. This is the first time in about a month since January 19 that unsettled balances from entrusted trading have surpassed 1 trillion won. These unsettled balances occur when securities firms lend money to investors and individual investors fail to repay within three trading days, representing short-term borrowed investment funds.

The securities industry and experts analyze that investors are focusing on low PBR stocks. Hyundai Motor's margin loan balance increased by 46.3% compared to the beginning of the year. During the same period, Kia increased by 46.3%, Shinhan Financial Group by 64.2%, and KB Financial Group by 52.2% respectively.

Ji-hyun Kim, a researcher at Kiwoom Securities, said, "Last week, momentum was given once again to these stocks due to new positive news related to shareholder return tax support and the corporate value-up program scheduled for the 26th. Therefore, this week, depending on additional news related to the low PBR policy, we expect frequent rotation trading between low valuation stocks and high valuation stocks."

This content was produced with the assistance of AI translation services.