KOSDAQ Rallies 24% in Four Days as Margin Debt Unwinds

According to Korea Exchange, South Korea's KOSDAQ index rallied 24% over four trading days through August 5, rebounding sharply from a 47.4% decline off April highs. The index closed August 5 at 799.59, up 2.42% for the day.

The recovery was driven primarily by unwinding of margin debt, with KOSDAQ margin loan balances declining 47.2% from 11.05 trillion Korean won in late April to 5.83 trillion won as of August 3, according to Shinhan Investment Securities. As forced liquidations eased, institutional investors purchased 1.009 trillion won in KOSDAQ shares over the four trading days, anchoring the rebound.