Extending trading hours could boost volume 8%

Extending daily trading time for Korean markets may boost trade volume by up to 8 percent, according to the local securities industry.

The Korea Exchange (KRX) on Thursday announced it will work on extending daily trading time by 30 minutes from its current six hours.

Following the announcement, Hana Financial Investment said Friday that the extension could increase the trade volume by 8 percent, or 690 billion won ($576 million), to 8.3 trillion won per day.

This would increase the revenue for local securities firms make on trading fees by up to 349 billion won annually, Hana said.

Some in the industry forecast that the actual trading volume may be even larger than Hana’s estimate, considering that the number of trades usually rises near the opening and closing times.

Trade volume doubled in Seoul’s main bourse, the Kospi, in 2000, right after the KRX eliminated the policy that temporarily closed the market for lunch between 12 p.m. and 1 p.m.

Securities markets typically see trade volume surge after extending operating times.

Hong Kong lengthened the trading time for its market by an hour in March 2011, and saw trade volume surge 45 percent within a month.

Singapore, which extended hours in August 2011, and India, which did so in January 2010, also saw their trade volumes rise by 41 percent and 17 percent within a month, respectively.

Some doubt the surge will last long, saying that an extension in hours won’t revitalize the main Korean market, which has been nicknamed the “Boxpi” in recent years because of its failure to grow.

Still, Hana is hopeful that there’s enough liquidity to flow into the market this year, considering that customer deposits at local financiers have reached a decade high of 22 trillion won.

BY PARK JIN-SEOK, KIM JI-YOON [kim.jiyoon@joongang.co.kr]