Financial transaction

[Newsmaker] Kospi’s average daily trading volume hits year-old low in October


South Korea’s main stock market saw its trading volume hit its lowest level in a year this month, data showed on Sunday, amid market instability ahead of central bank monetary policy meetings here and in the United States.

The Kospi’s average daily trading volume was 11.75 trillion won ($ 10 billion) in October, the lowest level since the 10.85 trillion won posted a year ago. , according to data compiled by the Korea Stock Exchange.

The figure almost halved from January this year, when it hit 26.4 trillion won, when the benchmark surpassed 3,000 points for the first time. As of October 22, the average daily trading volume on the main exchange reached 905 trillion won, dipping below 10,000 billion won for the first time since November 2 last year to 8.51 trillion won. of won.

The amount of the Kospi trade and the movement of the main exchange are closely related, according to market watchers. Meanwhile, the benchmark closed at 2,970.68 points on Friday, losing 3.2% this month.

The ratio of revenue to market capitalization also fell to the second lowest monthly level this year. October’s average daily revenue was 10.29%, while January’s figure marked the lowest monthly level of 8.69%, according to the data.

The sharp declines are largely attributable to the collapse of the key index, coupled with inflation concerns and central bank monetary tightening measures, fueling investor anxiety, analysts said. Investors are paying close attention to major upcoming events that could affect the local stock market, they added.

Market experts expect the U.S. Federal Reserve to announce a plan to reduce its asset purchases at its November 2-3 meeting and that the actual reduction would begin in mid-November or mid-November. December. The downsizing exercise is expected to have more of an effect on emerging market equities in the near term, but the impact will be limited as the value of the news has already been built into the markets, they predict.

“Amid slower economic growth in the United States in the third quarter, the downsizing exercise could temporarily lower confidence in the stock markets,” said Kim Young-hwan, analyst at NH Investment & Securities. “But since this is not a policy of withdrawing liquidity, the event will not be a long-term adverse external factor.”

The Bank of Korea is also expected to raise its interest rate to 1% from 0.75% at its November 25 policy meeting to address concerns about a financial imbalance linked to the economic recovery. Even though the uncertainties surrounding next year’s rate hike plan could increase the load on the local stock market, some analysts say.

“The rate hike plan (of the Bank of Korea) is certain, but the prediction of the timing of the next rate hikes and the level of the hikes remains uncertain. … Based on the results of the BOK rate-setting meeting in November, the market will try to find clues about future monetary policy, ”said Kim Sung-soo, analyst at Hanwha Investment & Securities.

By Jie Ye-eun ([email protected])


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