CICC: Korean stock absolute leverage has reached historical highs.

Golden Finance reports that on June 29, CICC Research said that, overall, the current on-market leverage multiple in the Korean stock market is around 2x~5x. Absolute leverage has already reached historical highs; however, when compared across and along dimensions relative to market capitalization, it is not at an extreme level. Market sentiment and liquidity indicators are somewhat tense, but not significantly so. Looking ahead, high leverage itself can amplify volatility and even bring about liquidity pressure. For instance, a decline of 16~36% could trigger margin calls, and the pressure from recent forced liquidations has been rising, but the medium- to long-term trend depends more on fundamentals.
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