The turnover rate for KOSPI-listed shares has declined for six straight months, leaving trading activity subdued. Market participants say sidelined money will return only once interest rates and oil prices stabilize and third-quarter corporate earnings provide support.
The average daily turnover rate for KOSPI-listed shares came to 0.50% from the 1st to the 23rd of this month, the lowest level this year, according to the Korea Exchange on the 28th. The turnover rate, calculated by dividing trading volume by the number of listed shares, gauges how actively a market is trading. After peaking at 1.74% in March, the rate fell in April (1.48%), May (1.13%), June (0.81%), July (0.72%) and August (0.54%), marking six consecutive months of decline.
Analysts said short-term trading, which surged during the volatile swings of June and July, has since cooled, leaving investors waiting longer for a clear catalyst. Retail investors put shares on the market each time prices recover toward their purchase levels, while foreign investors have also held back from aggressive buying amid pressure from interest rates and oil prices. This month, retail and foreign investors sold a net 16.69 trillion won ($11.9 billion) and 16.42 trillion won ($11.7 billion) worth of shares, respectively, on the main bourse. Share buybacks by Samsung Electronics (005930.KS) and SK hynix (000660.KS), which had recently propped up the market, were 85.95% and 66.27% complete as of the 28th, leaving less room for that support. Investor deposits at brokerages, the cash waiting to enter the market, stood at 101.63 trillion won as of the 23rd, barely above the 100 trillion won mark.
The KOSPI closed at 6,889.74 on the 28th, down 191.18 points, or 2.70%, from the previous session. The index slipped back below 7,000 in the wake of a sharp rise in long-term U.S. Treasury yields. Samsung Electronics and SK hynix fell 5.05% and 5.43% to 270,000 won and 1.768 million won, respectively, dragging the index lower. Concerns over delays in artificial intelligence data center development at U.S. software company Oracle also weighed on sentiment.
Investors point to the U.S. personal consumption expenditures (PCE) price index for August and Micron's earnings, both due on the 30th, as key to any rebound. Securities analysts said funds could flow back into the market only if macroeconomic pressures ease and earnings season guidance meets expectations. "The issue is less about rates themselves than about what kind of momentum can overcome them, and the key will now shift to fundamentals," said Lee Kyoung-min, a researcher at Daishin Securities.
