It has been reported that foreign securities firms have expressed their intention to participate in the alternative exchange NextTrade. If they join, the number of foreign investors trading Korean stocks for 12 hours a day is expected to increase.
According to the financial investment industry on the 27th, JP Morgan, Morgan Stanley, Goldman Sachs, and others have conveyed their intention to join during the 'second opening' of NextTrade. Currently, 29 domestic securities firms are participating in NextTrade, which means that the range of securities available for trading by foreign securities firms may widen during the second opening scheduled for October.
With relatively low fees, NextTrade has been rapidly increasing its market share through the pre-market (8 a.m. to 8:50 a.m.) and after-market (3:40 p.m. to 8 p.m.), which seems to have heightened the interest of foreign securities firms. The percentage of the overall market occupied by NextTrade has exceeded 30% based on transaction value this month.
If foreign securities firms participate, the number of foreign investors using NextTrade is also expected to increase. Based on the third week of June (16th to 20th), the trading ratio of NextTrade by investor type shows individuals at 89.1%, foreigners at 9.1%, and institutions at 1.8%. The foreign investor trading ratio has rapidly increased from 0.4% when NextTrade was launched in March.
However, it remains uncertain whether all foreign securities firms that have expressed their intention to participate will be able to join during the second opening. This is because they need to establish the smart order routing (SOR) system and consider trading stability.
A representative from NextTrade stated, "Several securities firms are showing interest, but there is not much time until the second opening, so we need to see how many actual firms will be added."