Mobile stock trading breaks another record

Trading of Kosdaq stocks via smartphone has reached a record level, the Korea Exchange said Sunday, with mobile transactions accounting for nearly 40 percent of all trading on Seoul’s secondary board.

As of Thursday, the total number of stocks bought and sold on the Kosdaq through the exchange’s mobile trading system was 279.5 million, according to the market operator. The total amount of stocks traded on Thursday was 692.3 million.

Last year, mobile transactions accounted for 36.1 percent of all trade, compared to this year’s 39.4 percent. With the advent of smartphones, use of the mobile trading system has grown sharply. In 2009, when smartphones were first introduced to Korea, trade on the system only made up 2.8 percent, but it has been reaching all-time highs every year since.

The reasons behind the increase include not just the proliferation of smartphones but also special sign-up deals that some brokerages offer for installing their mobile apps.

The country’s top 10 firms have been especially aggressive, even doling out free commissions. The two largest, Mirae Asset Daewoo and NH Investment & Securities, have been fiercely competing to woo investors to their apps.

Last month, NH Investment & Securities had a limited-time offer where customers that opened a “namuh” account with the firm would not be charged commission for the rest of their lives.

Mirae Asset Daewoo countered that by extending its limited-time offer exempting commissions for eight years. The event was supposed to end last month, but the firm extended it for another two months.

Industry analysts say the success of online banks like Kakao Bank has pushed brokerages to strengthen their digital products and go after younger investors.

Consequently, the increased use of mobile trading apps has led to a decrease in use of home trading systems based on computers. Although these transactions still account for a majority on the Kosdaq, at 51.1 percent, the figure has fallen significantly from 86 percent in 2009.

That same trend can be seen on the primary board, the Kospi, where computer-based transactions now account for 43.3 percent, a sharp drop from 73.4 percent in 2009.

Mobile transactions, on the other hand, now account for 34 percent of Kospi trade, up from 2.4 percent in 2009.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]