Foreign and Institutional Investors’ Day Trading Ratio on the Increase

Korea Exchange announced on June 22 that the ratio of day trading in the South Korean stock market amounted to 85.3 percent for the first 17 days of this month. For reference, the ratio was 51.4 percent in March and 84 percent last month.

It explained that foreign and institutional investors’ day trading ratio substantially increased this month with the future direction of the market vague after KOSPI regained 2,000 points. Specifically, the ratio jumped from 63.4 percent to 86.6 percent in three months. “This tendency is more conspicuous in KOSDAQ than in KOSPI and their day trading of large-cap stocks is becoming increasingly frequent,” it said.

In the meantime, individual investors’ day trading value totaled 43.9 trillion won from June 1 to 17, approximately 80 percent compared to the total of the previous month. This month’s value is likely to exceed last month’s.

According to stock market experts, the current rapid increase in stock trading value has to do with the increased day trading volume. This month, the combined average daily trading value of KOSPI and KOSDAQ is 25,111.8 billion won whereas it was 18,492.3 billion won in March and topped 20 trillion won in April and May. At the same time, KOSPI’s average daily turnover ratio rose from 0.86 percent to 0.99 percent from March to this month, which means the frequency of trading increased.