Stock loans on KOSDAQ jump in March

Stock secured loans on the secondary local bourse jumped to a six-year high in March, data showed Thursday, as the market has extended its rallies. The combined amount of stock collateral loans for purchasing shares listed on the tech-heavy KOSDAQ market came to 1.95 trillion won (US$1.74 billion) on Tuesday, marking the highest amount since July 2007. The increase came as investors sought after shares listed on the secondary bourse, which has continued its rallies so far this year. The market index closed at 546.26 on Wednesday, up 10.06 percent from end-2012. The combined market capitalization of firms listed on the KOSDAQ market also surged to an all-time high of 123 trillion won on Friday, rising sharply from 109.1 trillion won tallied in December 2012. Market watchers said the buying spree is mainly attributable to heightened business sentiment of the country's small and medium enterprises as the new government earlier pledged to bolster support for smaller firms. Local analysts added that investors should be cautious as the sudden rise in the secondary bourse may imply a possible speculative movement in the market. "The volatility is rising on the KOSDAQ market as it is suffering from an excessive growth in such a short period," said Lim Soo-kyun, an analyst at Samsung Securities Co. Meanwhile, South Korea's main bourse has remained stagnant this year on a volatile foreign exchange market, with the benchmark Korea Composite Stock Price Index (KOSPI) closing at 1,959.41 on Wednesday, down 1.9 percent from end-2012.