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Foreign investors account for over 10% of trades in Nextrade

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By Lee Yeon-woo
  • Published KST
Nextrade officials monitor trading at the company's headquarters in Seoul, March 31. Newsis

Nextrade officials monitor trading at the company's headquarters in Seoul, March 31. Newsis

Foreign investors now account for over 10 percent of trades on Nextrade, the alternative trading system (ATS) said Tuesday. The rise is attributed to a booming local stock market, along with competitive transaction fees and favorable trading hours.

According to Nextrade's weekly trading data, foreign investors accounted for 10.2 percent of trades on the ATS from June 30 to July 4, surpassing the 10 percent threshold for the first time since its launch in March.

Foreign investors traded 4.83 trillion won ($3.5 billion), while retail and institutional investors traded 41.78 trillion won and 934.5 billion won, respectively.

The share of foreign investors on the ATS has been steadily increasing. It stood at just 0.4 percent in March, but rose to 9.2 percent between June 9 and 13.

Nextrade operates a pre-market session from 8 a.m. to 8:50 a.m. and an after-market session from 3:30 p.m. to 8 p.m., outside the Korea Exchange's regular trading hours. Its transaction fees are also 20 to 40 percent lower than those of the Korea Exchange.

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Following the election of President Lee Jae Myung, Korea’s stock market has gained momentum, with foreign investors showing increased trading activity.

Their contribution is expected to grow further as foreign investment banks are set to join the platform. Morgan Stanley, Goldman Sachs and J.P. Morgan have reportedly expressed their intention to join Nextrade in October.

When Nextrade first opened in March, only 28 domestic securities firms initially decided to participate. Foreign investment banks held off due to concerns over trading stability. However, with Nextrade now operating smoothly, they are reportedly beginning to seriously consider joining.

A Nextrade official said they are in contact with most foreign investment banks operating in Korea, and many have expressed interest in participating. "Once discussions and preparations are complete, we expect integration to be possible as early as October."