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Stock trading volume hits 15-month low in June

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By Jhoo Dong-chan

The total trading volume of Seoul stocks fell to a 15-month low in June despite a series of government efforts to revive the nation's sluggish stock market, according to a recent report.

The government lowered the securities transaction tax to encourage investors for the first time in 23 years last month, but the result fell short of expectations. In the meantime, the total bond trade volume reached a 15-month high thanks to investors' rush to less risky assets.

According to a report released by the Korea Financial Investment Association (KOFIA), Wednesday, the daily stock trading volume stood at an average 8.88 trillion won ($7.52 billion) in June, down 8.2 percent from the previous month's figure of 9.67 trillion won.

The decline came as a surprise since the government lowered the securities transaction tax last month to boost the nation's stock market.

The transaction tax for stocks listed on the benchmark KOSPI and secondary Kosdaq markets started being lowered by 0.05 percentage points to 0.25 percent in June. The tax for stocks listed on the tertiary KONEX market was cut by 0.2 percentage points to 0.1 percent.

Despite the government's efforts, the total trade volume of Seoul stocks dipped below the 9 trillion won level last month for the first time this year.

This is in stark contrast to investors' rush to bonds.

The report said the average daily bond trading volume reached 33.27 trillion won in June, up 24.6 percent from the previous month. This was the highest figure in 15 months since it topped 33.9 trillion won in March last year.

"This reflects investors' current sentiment favoring less risky assets," said Lee Chang-mok, managing director of the Research Division at NH Investment & Securities.

"This was driven by uncertainties in the global economy following a series of protectionisms arising across the world."


Jhoo Dong-chan jhoo@koreatimes.co.kr


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