CICC: Leverage in South Korean stocks has reached an all-time high

Golden Ten Data June 29｜According to a research report by China International Capital Corporation, overall, the current leverage ratio in the Korean stock market is around 2x to 5x. The absolute leverage has reached historical highs, but the relative market cap ratio is not extreme compared to global and historical benchmarks. Market sentiment and liquidity indicators appear slightly tense but not significantly so. Looking ahead, high leverage itself amplifies volatility and could even create liquidity pressure; a decline of 16–36% would trigger margin calls, and recent forced liquidation pressure has increased. However, medium- and long-term trends are more dependent on fundamentals.