Turnover of KOSDAQ market tumbles on resumed short selling

South Korea's minor bourse saw its turnover recently plunge below the 10 trillion-won ($8.98 billion) mark following a partial resumption of short selling, data showed Monday.

The daily turnover of the tech-heavy KOSDAQ market averaged about 8.8 trillion won over the last five sessions, far lower than the April figure of the 12 trillion-won range, according to the data from the Korea Exchange.

The daily turnover began to dwindle on April 30, one day before the country's financial regulator allowed a partial resumption of short selling after a 14-month ban.

The amount then tumbled to a yearly low of around 7.4 trillion won on Thursday as investors were apparently spooked by the resumed short selling.

Short selling is an investment technique in which investors sell borrowed shares in hopes of price falls, which will repurchase those shares at a lower price and return them for a profit.

In particular, retail investors' daily turnover came to an average of 7.5 trillion won over the last five sessions, down a whopping 34 percent from April.

Market analysts said the resumption of short selling had a negative impact on investors' trading of stocks listed on the tech-laden minor stock market.

In March last year, the Financial Services Commission imposed a six-month ban on short selling and later extended it to help ease pandemic-caused market routs.

Other watchers said the KOSDAQ's turnover might have dropped sharply as investors have scrambled to the country's virtual currency market that has been on a roll in recent months. (Yonhap)