KOSPI trading volume lowest in 33 months

The trading volume of the benchmark KOSPI fell to a 33-monthly low in October, the Korea Exchange (KRX) said Wednesday.

According to the KRX, the KOSPI’s average daily trading volume was 4.3 trillion won ($3.67 billion) this month, the lowest since volume stagnated at 4.11 trillion won in January 2017.

This means that on average 421.4 million shares were traded a day in October, less than half that of the secondary Kosdaq, which stood at 887.6 million shares a day between Oct. 1 and 29.

Experts said investors have taken a wait-and-see approach on the main bourse amid the ongoing trade talks between the U.S and China. In the meantime, the Kosdaq enjoyed momentum thanks to investors’ rush to biotech shares such as SillaJen and Helixmith.

“Investors’ confidence seemed to have recovered a bit over mounting expectations about the ongoing trade talks between Washington and Beijing,” Kiwoom Securities analyst Seo Sangyoung said. “Their interests are, however, largely concentrated in risky assets.

“Most investors, especially institutional and foreign investors, are still taking a wait-and-see approach. They are expected to make a move following the Federal Open Market Committee’s (FOMC) announcement about the U.S. policy rates.”

The KOSPI has been stagnating between 2,020 and 2,090 points for more than a month since it closed at 2,101.4 on Sept. 24.

KRX data suggested the current slump has been led by retail and foreign investors. Institutional investors bought 1.12 trillion won of shares between Oct. 1 and 29, but foreign investors sold 590.3 billion won of shares.

Foreign investors have continued their selling spree for three consecutive months since August.

Retail investors also dumped 837.3 billion won of shares in the period.

“The Bank of Korea lowered its key rate by 25 basis points this month,” a local securities firm analyst surnamed Kwon said. “The key rate now stands at 1.25 percent. It’s the lowest level ever.

“However, the current low interest rate failed to boost the KOSPI. This indicates Korea’s economy is continuously hanging on the edge while investors still doubt its possible recovery.”