KOSPI Trading Value Plummets to Annual Low Amid Shift to US Stocks

As the KOSPI fluctuates and remains trapped in a trading range, individual investors' enthusiasm for domestic investment is shifting toward buying US stocks.

According to SEIBRO by the Korea Securities Depository, domestic retail investors net purchased $2.396 billion worth of US stocks this month.

Even though the KOSPI rebounded to the threshold of the 7,000 level earlier this month, retail investors have continued their net purchases of US stocks for three consecutive months.

The declining exchange rate day by day is also cited as a contributing factor.

The US dollar-Korean won exchange rate has dropped sharply since breaking below the 1,400-won mark for the first time in 10 months on the 19th of last month.

While the dollar is projected to weaken amid concerns over the US fiscal deficit, export companies' demand for currency exchange to secure domestic investment funds is expected to continue for a considerable period.

Although dollar purchases for US stock investments are increasing, selling pressure on dollars by semiconductor export companies is formidable, effectively overwhelming them.

On the other hand, retail investors' enthusiasm for KOSPI investments has noticeably cooled.

From the beginning of this month through the 28th, the KOSPI average daily listed stock turnover rate recorded 0.54%, the lowest level so far this year.

The average daily trading value also hit an annual low of 25.7657 trillion won.

This marked a prominent decline of more than 11 trillion won compared to 36.8744 trillion won last month.

The net purchase volumes by retail investors in SK Hynix and Samsung Electronics, which led the upward rally in the first half of the year, plunged sharply down to the 1 trillion-won range each, dropping by about 7 trillion won and 3 trillion won respectively compared to last month.

In contrast, foreign investors during this period are analyzed to be employing a strategy of defending their yields through rotational buying across bio, shipbuilding, defense, and automobile sectors.

Reported by Kim Jiuk | Video by Seo Byung-wook | Graphics by Lee Jung-joo | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.