Evening session on South Korea’s KRX was volatile — Korea Herald
On South Korea’s KRX, the first week of operation of the new market after the end of the main session was accompanied by high volatility. The reasons were relatively low liquidity and the predominance of retail investors among trading participants, Korea Herald reports.
During the evening session, which runs from 16:00 to 20:00, an average of 54.85 million shares worth 1.1 trillion won, or about $811 million, were traded daily from September 14 through Friday. This accounted for 4.6% of the market’s total trading value.
Predominance of retail investors
During this period, volatility interruption mechanisms designed to curb excessive price fluctuations were triggered 5,354 times on the evening market. This accounted for 77.17% of all such interruptions.
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More than 90% of transactions during the evening session were carried out by retail investors. Foreign investors accounted for 6.7%, while institutional investors accounted for 2.6%. Limited participation by major players, including pension funds, reduces the diversity of market participants and may intensify price fluctuations.
Example involving Pony Link shares
Low liquidity was also recorded in shares of small and medium-sized companies listed on Kosdaq. In particular, on September 14, Pony Link shares ended the main session at 2,400 won and rose to the daily limit of 3,150 won during evening trading. At the same time, trading volume in the evening session was only 1,417 shares — about one-tenth of the total daily volume of 15,641 shares. The following day, the main session’s closing price fell to 2,365 won.
KRX stressed that the number of volatility interruptions is not necessarily a direct indicator of market instability. This mechanism is intended to prevent transactions at abnormal prices and facilitate market price formation through single-price auctions. On the first day of evening trading, the mechanism was triggered 1,112 times, and by Friday the figure had declined to 553. KRX also plans to operate a market monitoring group until the end of the year amid concerns about potentially unfair transactions.
