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Stock market's turnover hits 7-year low

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(GlobalPost/GlobalPost)

SEOUL, July 2 (Yonhap) - Share turnover on the Seoul bourses hit a seven-year low in the first half of 2013 as investors sought after safer assets amid rising geopolitical risks and unfavorable overseas factors, data showed Tuesday.

The turnover on the local stock markets came to 651 trillion won (US$573 billion) in the January-June period, the lowest since the 530 trillion won tallied in the second six-month period of 2006, the Korea Exchange (KRX) data showed.

It compares with the largest turnover of 1,143 trillion won tallied in the July-December period of 2011, the KRX added.

The main bourse accounted for 429 trillion won, trailed by the tech-heavy KOSDAQ market with 223 trillion won.

Market watchers said the decline is attributable to the rising tension with North Korea, which had issued near-daily threats in response to military drills conducted by the United States and South Korea.

"Abenomics," which refers to a mixture of aggressive monetary and fiscal policies preached by Japan's Prime Minister Shinzo Abe, also came as a major drag on the local stock markets as it sparked a weak yen.

A relatively stronger won inflicts foreign exchange losses on local exporters, and makes South Korean goods more expensive overseas, which puts local firms at a disadvantage in competing with Japanese firms.

In contrast, the combined turnover of bonds reached an all-time high in the first half of this year at 4,151 trillion won, compared to the 3,439 trillion won tallied a year earlier, as investors' appetite for safer assets grew.

Analysts forecast the lackluster stock trading in South Korea will gather ground during the second half on the back of rising hope for an economic recovery.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130701/stock-markets-turnover-hits-7-year-low