South Korea’s stock trade value in the first six months of this year has surpassed a full year level of 2019, mainly driven by active participation of retail investors who are seeking a profit opportunity in a post-coronavirus world.

According to Korea Exchange on Friday, cumulated trade value year to date as of Thursday in the main bourse Kospi and secondary Kosdaq reached 2,298.6 trillion won ($1.9 trillion), 0.3 percent higher than 2,287.6 trillion won for full 2019.

If current trend continues, the country’s total stock transaction value is expected to hit a record high this year since 2000. The previous annual peak was 2,799.7 trillion won tallied in 2018.

By market, trade value came to 1,216.3 trillion won in Kospi and 1,077.2 trillion won in Kosdaq.

An increase in stock trade value was mainly led by retail investors who accounted for 72.9 percent of total trading volume during the cited period. Their trade value reached 1,671.8 trillion won. For full 2019, retail investors accounted for 64.8 percent of total.

Retail investors have played a bigger role in the Kospi market. Data showed that retail investors accounted for 47.5 percent of total trading volume in Kospi last year, significantly lower than 60.5 percent as of July 2 this year.

Foreigners, meanwhile, rushed out of Korea’s stock market amid adjustments in global market due to coronavirus shock. Foreigners accounted for 19.5 percent of total trading volume in the main stock market this year, down from last year’s 28.4 percent, data showed.

Retail investors accounted for 86.9 percent of total trading volume in secondary Kosdaq, up from 84.7 percent during the same period.

The sharp rise in retail investors’ trading volume in the stock market comes as they seek alternative investment sources, mainly stock market, amid low interest rates and tougher real estate regulations.

This year, retail investors net purchased 39.3 trillion won worth of shares in Kospi and Kosdaq while foreign investors net sold 26.5 trillion won and institutional investors 13.9 trillion won.

Active participation by retail investors is seen as a positive element as they help solidify supply and demand in the stock market. In the past, the local stock market experienced volatility many times mainly due to foreign investors. Retail investors are now being considered as major players along with foreigners and institutions.

Market watchers, however, noted that it remains to be seen whether retail investors will remain in the stock market even after the market index hits a previous peak because low stock prices battered by the pandemic motivated many of them to join the market.

By Pulse

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