'Au (KOSDAQ)' Surpasses 'Hyeongnim (KOSPI)' for the First Time in 20 Years... Signs of Monthly Trading Volume Overtaking

[Asia Economy Reporter Lee Seon-ae] Since November, the daily trading volume of the KOSDAQ market has surpassed that of the KOSPI market. If this trend continues, the monthly trading volume could reverse for the first time in 20 years, drawing significant market attention. As the year-end approaches, the KOSDAQ is increasingly favored over the KOSPI, making it appear that the domestic stock market stage is dominated by the "younger brother's rebellion."

According to the Korea Financial Investment Association on the 23rd, on November 1, the KOSDAQ started ahead with a trading volume of 10.9386 trillion won compared to the KOSPI's 9.4108 trillion won. While the KOSPI's trading volume remained below 10 trillion won, the KOSDAQ surged between 11 trillion and 14 trillion won, showcasing intense enthusiasm. For four consecutive trading days from the 16th to the 19th, the KOSDAQ's trading volume exceeded that of the KOSPI.

The KOSDAQ market has always been somewhat "neglected" compared to the KOSPI market. This characteristic was clear even at the peak of stock enthusiasm earlier this year. The trading volume difference averaged around 10 trillion won and sometimes widened to 20 trillion won. This is because investors preferred large-cap KOSPI stocks led by automobiles, secondary batteries, and information technology (IT).

The last time the KOSDAQ's monthly trading volume surpassed the KOSPI's was in October 2001. However, if the current KOSDAQ preference continues, it is expected that before the year ends, the "younger brother" (KOSDAQ) will break through the "older brother" (KOSPI)'s wall for the first time in 20 years.

This is due to the rising popularity of small and mid-cap KOSDAQ stocks equipped with high themes. Huh Jae-hwan, a researcher at Eugene Investment & Securities, explained, "The significant proportion of eco-friendly and gaming-related stocks in the KOSDAQ has a large impact," adding, "The KOSPI is concentrated with heavy industries like Hyundai Motor and Samsung Electronics with large market capitalizations, so interest is shifting to the KOSDAQ."

Expectations for strong performance from gaming, eco-friendly, and bio companies next year are also accelerating the shift in focus toward the KOSDAQ. Lee Kyung-soo, a researcher at Hana Financial Investment, stated, "Recent adjustments in earnings estimates for next year inevitably sustain the relative strength of mid-cap stocks and the KOSDAQ."

Improvements in the market investment environment, such as the introduction of new KOSDAQ indices, are also expected to be driving forces sustaining the KOSDAQ's strength. Ha In-hwan, a researcher at KB Securities, explained, "With the introduction of new KOSDAQ indices, which are likely to be composed mainly of large-cap stocks within the KOSDAQ, purchases by pension funds and investment trusts can be anticipated." The start of "regulations on convertible bond issuance (refixing regulations)" from December 1 is also noteworthy. Researcher Ha emphasized, "Since the majority of convertible bond issuance is in the KOSDAQ and the IT and healthcare sectors within the KOSDAQ, the risk is expected to be resolved, leading to a favorable trend."

However, the key point to watch is whether the concentrated net buying of Samsung Electronics and SK Hynix continues following the formation of a semiconductor bottom theory the previous day. If buying momentum flows into semiconductors and also into the automobile sector, which is gathering weight in the bottom theory, it is judged that it will be difficult for the KOSDAQ's monthly trading volume to surpass the KOSPI's within this year.