STOCKS | South Korea’s Forced Stock Liquidations Reach 344.2 Billion Won in July Amid KOSPI Slide

South Korea’s forced liquidations of on-exchange margin positions totaled 344.2 billion won in July, with 142.2 billion won liquidated on July 9, data from the Korea Financial Investment Association showed. According to Odaily, the liquidations were driven by a sharp stock market decline that triggered concentrated deleveraging in credit-funded positions. The report noted that forced liquidation data are reported with a two-trading-day delay, meaning liquidation pressure linked to the KOSPI’s sharp drop on July 13 had not yet been fully reflected in the statistics. The market expects liquidation volumes to rise further. On July 13, South Korean equities saw heavy volatility, with the KOSPI closing down 8.95% after triggering the Sidecar sell-side trading halt mechanism and a Level 1 circuit breaker during the session. Semiconductor stocks led declines. SK Hynix fell 15.37%, marking its largest single-day drop on record, while Samsung Electronics closed down 10.7%. The report added that South Korean retail investors’ margin balances and credit financing balances have continued to shrink, contributing to a negative deleveraging cycle described as “stock price declines, forced liquidations, and further price drops.”