Seoul - YONHAP
The turnover of the South Korean market hit a six-year low in February largely due to lingering economic jitters, with the trading volume of derivatives also sagging, data showed Thursday.
The daily turnover of the main bourse averaged 3.67 trillion won (US$3.38 billion) last month, the lowest since the 3.15 trillion won tallied in March 2007, according to the data by the Korea Exchange (KRX).
This compares with the largest daily turnover of 9.19 trillion won recorded in April 2011, when the stock market was bullish, which shows that the daily turnover has plunged 60 percent in the last two years, the KRX said.
In February, the daily turnover dipped 17.1 percent on-month, with the value of trading volume hovering below 2 trillion won per day.
Officials at the bourse operator cited remaining economic uncertainties that have made investors abstain from stock investment. With the South Korean economy stuck in a slowdown, retail investors avoided making risky bets due to their falling asset values, which led to a lot of fund withdrawals, they said.
\"Even institutional investors have been taking a defensive approach, leaving the market to be led by foreigners,\" a KRX official said.
Lingering concerns over the United States\' automatic spending cuts, a weaker Japanese yen and political insecurity in Italy also contributed to dampening local investors\' appetite, although foreigners have turned net buyers, experts said.
The data also showed the local derivatives market suffered a slump last month. The number of trading contracts tumbled 72.2 percent on-year to 3.4 million cases with the daily turnover falling 10.8 percent to 46.5 trillion won.
Less market volatility has sapped demand for derivatives from aggressive investors who are willing to take more risks, officials added.
Analysts forecast the lackluster stock trading in South Korea to continue for some time on the economic downturn, warning that it could crimp the stock market\'s main role as a channel for corporate funding.