The first after-hours session on South Korea’s main stock exchange saw erratic and retail-dominated trading, in a sign of the challenges ahead as it seeks to attract more global investors.
Monday’s launch represents the first step by a major Asian exchange toward around-the-clock trading. Nasdaq Inc. and the New York Stock Exchange are among other markets looking at such moves to better tap international demand.
Korea Exchange now offers late trading between the hours of 4 p.m. and 8 p.m. In Monday’s extended session, volatility spikes in individual stocks triggered brief trading halts 1,637 times, more than four times the number during the day’s regular session, according to data from the bourse.
“Institutional traders mostly stayed on the sidelines, so there just weren’t enough buy and sell orders in the market,” said Sanghyun Park, founder of Clepsydra Capital. “Retail investors clearly want after-hours trading, but until bigger players step in and provide more liquidity, it’s likely to remain pretty risky.”
A total of 2,501 different stocks were traded in the evening hours, with some activating the so-called volatility interruption mechanism more than once.
Individual investors accounted for 93% of the extended session’s total turnover of 1.8 trillion won , Korea Exchange said in a statement. Foreign investors accounted for just 3.9%, with local institutions accounting for the rest.
Extended hours have been seen as a way to help level the playing field for retail traders, and allow more investors to quickly act on late-breaking news. Seasoned investors are bracing for volatility, however, as global exchanges look to keep pace with the 24-hour trading provided by electronic platforms.
“Smaller stocks were an absolute roller coaster, jumping 15% to 30% on relatively minor news before dropping just as quickly,” Clepsydra’s Park said, describing Monday’s session.
This article was generated from an automated news agency feed without modifications to text.
