Debt-financed stock investment booming as market surges in South Korea

Soaring housing prices and youth fears for the future drive risk-taking

The Korea Composite Stock Price Index (KOSPI) achieved a historic milestone by jumping beyond 6000 points in February. A factor in the rise has been an increase in debt-financed investing. © Yonhap

SEOUL -- Debt-financed stock investing is overheating in South Korea. Margin loans to retail investors have doubled in April from a year earlier to over 30 trillion won ($20 billion), as surging home prices and pension worries push individuals toward riskier bets. The government now faces the task of protecting retail investors.