Even in July, when the KOSPI’s “Honeymoon Rally” died down, the KOSDAQ remains outside investors’ interest. The market’s transaction value itself has fallen to the lowest level, and the proportion of individual investors’ transactions, the center of KOSDAQ transactions, remains at the bottom due to the burden of taxation.
According to the Korea Exchange on the 25th, the average daily trading amount on the KOSDAQ market until this day is 6 trillion won.
The daily average transaction value of KOSDAQ, which recorded 7.1 trillion won last month when the domestic stock market was rising around the KOSPI, has decreased by more than 1 trillion won this month when KOSDAQ recovered to the 800-point level.
Moreover, this month’s average daily transaction value is also the lowest on a monthly basis in the past year. In October last year, when stock market transactions plunged due to concerns over the U.S. presidential election and the implementation of financial investment income tax, the average daily transaction value was about 3 billion won higher than this month.
Although the KOSPI market has slowed down from last month, the reduction in transaction value was small compared to KOSDAQ. The average daily transaction value of the KOSPI market this month was 12.7 trillion won, down from 15.2 trillion won last month, but it was the second highest in the past year.
Last month, expectations for the new government’s policy were centered on large-cap stocks, leading to a wide gap in gains between the KOSPI (13.86 percent) and KOSDAQ (6.42 percent). However, the KOSPI (4.05%) and KOSDAQ (3.26%) rose similarly this month, and KOSDAQ is suffering from a “supply and demand drought” despite the fact that the burden of valuation (valued value) has been reduced.
With the total amount of transactions shrinking, the proportion of individual investors, a key trading entity of KOSDAQ, remains on the decline.
Last month, as foreign investors actively participated in KOSDAQ transactions, the proportion of individual investors’ trading value in the KOSDAQ market slipped to the 72% range. This month, foreign transactions are also low, continuing to reach the 72% level again.
The proportion of individual investors’ transaction value in the KOSDAQ market exceeded 80% until the beginning of last year when the secondary battery craze continued, and this year, it exceeded 76% until May, but has dropped sharply since last month.
The absence of leading stocks and the government’s push for tax increases are seen as the background of KOSDAQ alienation. As the government recently decided to raise the securities transaction tax and expand the scope of capital gains tax for major shareholders, individual transactions, which are the main pillars of KOSDAQ supply and demand, are shrinking.
Han Ji-young, a researcher at Kiwoom Securities, said, “The tax increase plan, such as returning the standard of transfer tax for major shareholders to 1 billion won, would have made individual investors feel burdened by KOSDAQ investment,” adding, “The fact that secondary batteries and bio, which are central industries, do not show a trend upward trend and show mixed trends is also bad news.”
