What is causing the surge in the Korean stock market?

The surge in the Korean stock market is being driven by the booming semiconductor industry, which is being fueled by the rapid growth of artificial intelligence (AI) technology.

Why are experts warning about a potential bubble in the Korean stock market?

Experts are warning about a potential bubble in the Korean stock market due to the surge in leveraged investing by retail investors. The ratio of margin loans to deposits has reached about 30%, raising concerns about the risks of excessive leverage.

What is the Korean government doing to address the stock market surge?

The Korean government appears determined to keep pushing stocks higher, even setting a target of "Kospi 5,000" for the benchmark index. However, regulators have been criticized for their lax stance, with one official stating that "leveraged investing is just another form of investment."

Home / Business and Economy / Korean Stock Surge Stokes Fears of Policy-Driven Bubble

Korean Stock Surge Stokes Fears of Policy-Driven Bubble

13 Nov, 2025

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Summary

Korean benchmark Kospi index up over 70% in 2025
Surge driven by AI-fueled semiconductor boom
Margin loans and leveraged investing surging, raising volatility risks

Korean Stock Surge Stokes Fears of Policy-Driven Bubble

As of November 13, 2025, Korea's benchmark Kospi index has risen more than 70% this year, the highest gain among global indexes. Much of this momentum has come from the booming semiconductor industry, driven by the rapid growth of artificial intelligence (AI) technology.

However, beneath the rally lies growing unease. The volatility index, VKOSPI, has spiked to 44, far above the stable range of 10 to 20, signaling heightened market sensitivity. Investor deposits have reached a record 88 trillion won ($60 billion), and margin loans stand at 26 trillion won. The ratio of margin loans to deposits is about 30%, raising concerns about the surge in debt-financed investing.