The credit transaction loan balance in the KOSDAQ market increased to 7.3 trillion won amid the political theme stock frenzy known as 'debt-to-invest' (borrowing to invest). It was found that the proportion of the credit investment balance of a specific candidate's theme stock surpassed 9% in terms of market capitalization.
According to the Korea Financial Investment Association on the 27th, the KOSDAQ market's credit transaction loan balance was reported to be 7.2999 trillion won as of the 24th. This represents an increase of about 12% compared to the credit transaction loan balance of 6.5246 trillion won at the beginning of this year (Jan. 2).
The credit transaction loan balance, which represents the money investors borrow from brokerages to invest in securities but have yet to repay, is a key indicator of 'debt-to-invest.' However, the credit transaction loan balance in the securities market (KOSPI) also increased to between 9 trillion and 10 trillion won, but the growth rate was 9%.
With the early presidential election confirmed for June 3, analyses suggest that 'debt-to-invest' is deepening in the KOSDAQ market, where political theme stocks are clustered. Most political theme stocks, such as ATEC, Sangji Construction, and SIGONG TECH, are listed in the KOSDAQ market.
According to the KOSCOM check, about 10% of the market capitalization of ATEC, classified as a theme stock of presidential candidate Lee Jae-myung from the Democratic Party of Korea, is attributed to debt-to-invest. In addition, Finger and Semyung Electric Machinery also had debt-to-invest proportions exceeding 8% relative to their market capitalization.
The debt-to-invest frenzy in theme stocks is expected to continue for some time. With concerns about economic recession rising, the possibility of the Bank of Korea lowering the benchmark interest rate in May is increasing, and as candidate-specific election camps are formed and policy pledges are solidified, the likelihood of more theme stocks emerging is growing.
Meanwhile, experts point out that investing in political theme stocks with large fluctuations without proper justification should be avoided. After being traded at 39,050 won on the 2nd, ATEC has yet to recover its high point.