Seoul suspends its 140% margin rule for three months as SK hynix falls 11.7% despite a record quarter
South Korea suspended the collateral rule that forces brokerages to liquidate margin accounts, announced the same morning the KOSPI broke 5,000 and tripped its 11th circuit breaker of the year. Seoul is spending three months of policy flexibility on the view that leverage, not AI demand, is doing the selling.
Vincent Jiang · 3 min read
A record quarter, then a 25% slide
Minutes into Friday's session in Seoul, SK hynix+5.39% — SK hynix, up 5.39 percent today, the high-bandwidth memory (HBM) supplier whose chips sit beside Nvidia's+6.24% — Nvidia, up 6.24 percent today AI accelerators, fell 11.71% to 1,116,000 won 14. Samsung Electronics−6.35% — Samsung Electronics, down 6.35 percent today, its fellow memory maker, dropped 9.98% to 181,400 won 4. Nine days earlier SK hynix had reported record quarterly revenue of 104.62 trillion won, its first quarter above 100 trillion, up 328% year on year at a 79.7% operating margin 78. The stock has lost roughly a quarter of its value since the print.
SK hynix has lost a quarter of its value since its record quarter
The record quarter of October 28 held the price for barely a week
Data
| SK hynix share price (won) | |
|---|---|
| 28 Oct close | ₩1,487,000 |
| 5 Nov close | ₩1,264,000 |
| 6 Nov after halt | ₩1,116,000 |
Seoul suspended the rule that manufactures forced sellers
The policy answer came the same morning. At an emergency meeting on November 6 chaired by Deputy Prime Minister and Finance Minister Lee Hyoung-il, with the Financial Services Commission, the Financial Supervisory Service and the Bank of Korea present, the government exempted brokerages from the mandatory 140% collateral maintenance ratio on margin loans for three months starting November 9 23.
Under that rule, an investor whose collateral falls below 140% and misses the top-up deadline leaves the brokerage no choice but to sell at the next open; Seoul ran the same waiver for three months in July 2022 2. The government called the domestic market "overly reactive to external factors" and warned against "excessive pessimism driven by undue anxiety" 2.
The selling was foreign and mechanical
The KOSPI fell as much as 8.8% to 4,911.28, below 5,000 for the first time since February 6, tripping a circuit breaker at 9:03 a.m. that halted trading for 20 minutes, the 11th this year 94. The index first crossed 9,000 in June 5.
Foreign investors sold a net 3.4 to 3.8 trillion won on Thursday, taking five-session selling to 9.3 trillion won, while domestic retail and institutions were net buyers on Friday morning 154.
The trigger came from Wall Street, not Seoul
New York set it off: the S&P 500 fell 4.36%, the Nasdaq 5.52% into correction, and the Philadelphia Semiconductor Index 12.25%, its worst day since March 2020, after Democrats swept Congress and Texas governor-elect Gina Hinojosa vowed to "stop what we are doing with data centers" 16.
Chips led the rout on both sides of the Pacific
Data
| Value | |
|---|---|
| Philadelphia Semis | -12.25% |
| SK hynix | -11.71% |
| Samsung Electronics | -9.98% |
| KOSPI | -8.8% |
| Nasdaq | -5.52% |
| S&P 500 | -4.36% |
Japan's Nikkei entered bear-market territory, more than 20% below its June peak 6. Goldman Sachs'+1.10% — Goldman Sachs, up 1.10 percent today Asia-Pacific equity strategist Timothy Moe named position unwinding and stop-loss selling, not earnings, as the driver 10.
The order book still says sold out
Daishin Securities analyst Lee Gyeong-min holds that a sweeping federal construction halt "remains limited" 4. SK hynix says demand outruns supply through 2030, and 14 customers hold long-term contracts over more than half its 2027 and 2028 capacity 78. The crack sits in its own income statement: net profit missed estimates on an 11.6 trillion won currency loss and an about 22.9 trillion won impairment tied to Kioxia 8.
Monday's open is the tell
Watch whether Seoul activates its stock-market stabilization fund or bans short selling, steps participants expect it may take 5, and where the selling lands. If it clusters at the open, it is mechanics; if it runs all session, it is the demand story. The clock Seoul set itself expires in February, and officials say more measures are ready 23.
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