Kospi stocks account for 1.3 trillion won, Kosdaq for 492.5 billion won

Tradable securities expand from roughly 600 to nearly all listed companies

The Korea Exchange's after-hours market is open at its Yeouido headquarters in Seoul on Monday. KRX began operating the after-hours session from 4 p.m. to 8 p.m. for both the Kospi and Kosdaq markets. [Yonhap]
The Korea Exchange's after-hours market is open at its Yeouido headquarters in Seoul on Monday. KRX began operating the after-hours session from 4 p.m. to 8 p.m. for both the Kospi and Kosdaq markets. [Yonhap]

The Korea Exchange's new after-hours market, designed to let investors trade freely on their commute home, wrapped up its opening session Monday on a successful note.

According to Korea Exchange data, the KRX after-hours market — which runs from 4 p.m. to 8 p.m. — recorded trading volume of 72.24 million shares and a turnover of 1.82 trillion won ($1.35 billion) on its first day.

That represents 7.04 percent of the regular session's share volume and 8.03 percent of its turnover. The regular market, which runs from 9 a.m. to 3:30 p.m., saw 900.05 million shares change hands worth 25.81 trillion won.

Breaking down the after-hours figures by market, Kospi-listed stocks accounted for 22.18 million shares and 1.33 trillion won, while Kosdaq stocks saw 50.06 million shares traded worth 492.5 billion won.

The rival alternative trading system Nextrade (NXT), whose after-hours session runs from 3:40 p.m. to 8 p.m., recorded 12.17 million shares and 1.79 trillion won over the same period.

Until Monday, Nextrade had been the sole operator of an after-hours market in South Korea. With KRX's entry, stock orders are now routed between the two exchanges by a smart order routing (SOR) system, effectively splitting after-hours market share roughly evenly between them.

The SOR system automatically directs an investor's order to whichever exchange offers better terms — comparing price, fees, costs, order size and the likelihood of execution — when the investor does not specify a venue.

Combined across KRX and NXT, the domestic stock market logged total trading volume of 1.06 billion shares and a turnover of 37.56 trillion won on Monday.

Against that backdrop, KRX's after-hours market accounted for 4.84 percent of total domestic turnover on its opening day, while NXT's after-hours session held a 4.76 percent share.

KRX's entry into after-hours trading also significantly broadens the range of securities available to retail investors during those hours. Because capital markets regulations cap an alternative trading system's average daily volume at 15 percent of KRX's, Nextrade had been limited to roughly 600 tradable securities. With KRX now in the market, nearly all listed companies are accessible.

The outlook for further growth is also supported by broker participation: of the roughly 50 securities firms registered with KRX, nearly 40 — including foreign brokerages — have indicated they will take part in the after-hours market.

The extended session is expected to let investors quickly adjust their portfolios in response to news released after the regular close, and to ease time-zone access barriers for foreign investors.

Experts say the launch of KRX's after-hours market is significant both for widening investors' choice of trading venue and for marking a first step toward around-the-clock trading over the longer term.

"With major US exchanges such as NASDAQ set to launch 23-hour trading by the end of this year, competition for liquidity is intensifying," said Song Ki-myung, deputy president of Korea Exchange. "We have laid the minimum infrastructure our capital markets need to compete with overseas markets."


hss@heraldcorp.com