In the alternative trading system (ATS) NextTrade, all listed stocks belonging to the domestic two major benchmark indices, KOSPI 200 and KOSDAQ 150, will be available for transaction. Whether the transaction size increases and whether institutional and foreign investors fully adopt NextTrade will be key.
According to NextTrade on the 22nd, the number of stocks available for transaction will increase from the current 110 to 350 starting on the 24th. This includes 200 companies listed on the KOSPI market and 150 companies on the KOSDAQ market, which are the components of the KOSPI 200 and KOSDAQ 150 indices, respectively.
Both major stocks on the KOSPI market, Samsung Electronics and SK hynix, along with LG Energy Solution, Samsung Biologics, and Hyundai Motor, can be traded on NextTrade. Additionally, leading stocks on the KOSDAQ market, such as Alteogen, Ecopro BM, HLB, Ecopro, and Rainbow Robotics, will also be eligible for transaction on NextTrade.
The total market capitalization of the stocks that can be transacted on NextTrade until this week was 169 trillion won based on the previous day's closing price, but it is projected to jump to 2,100 trillion won.
The share of transactions is also significant. Stocks included in the KOSPI 200 and KOSDAQ 150 indices accounted for 67.2% of domestic stock transaction volumes in the last month. Considering that the transaction volume share of the 110 stocks that were available for transaction on NextTrade during the same period was 4.6%, this is about 15 times larger.
This suggests that the daily transaction volume scale on NextTrade, which had been stuck around 10 billion won, could change. Up until this week, particularly the pre-market (8 a.m. to 8:50 a.m.) and after-market (3:40 p.m. to 8 p.m.) transactions were sluggish, resulting in cases where even a single share being concluded could trigger upper and lower price limits.
There is a possibility that the participants in the NextTrade market will diversify. If institutional and foreign investors can transact all the stocks included in the benchmark indices, the low trading fees compared to the Korea Exchange could attract attention. Up to now, individual investors have accounted for about 98% of the transaction volume on NextTrade.
In the past month, institutional investors transacted stocks previously concluded on NextTrade, totaling about 6.3 trillion won. However, if we expand this to include KOSPI 200 and KOSDAQ 150 index stocks, the figure exceeds 79.2 trillion won. Similarly, the total transaction volume for foreign investors grew from 10.7 trillion won to 143.6 trillion won.
As the transaction volume surges, concerns are also being raised. On the 18th, a computer malfunction at the Korea Exchange caused all transactions to be disrupted for seven minutes, an unprecedented situation. It was revealed that the newly introduced 'mid-price quoting' method, initiated with the launch of NextTrade, conflicted with the existing 'self-trade prevention condition quoting' method. In response, the Korea Exchange and NextTrade agreed to conduct joint inspections every weekend until the end of April to stabilize the system.