The value of shares traded on South Korea’s second-tier stock market Kosdaq in 2017 hit an all-time high as of Friday, riding the momentum of biotech shares and heightening volatility of shares linked to the cryptocurrency industry since November, data showed Tuesday.

From Jan. 2, 2017 to Friday, investors traded stocks worth 876.3 trillion won ($813.9 billion) in total, beating the previous record of 873.8 trillion won in 2015, according to data from the market operator Korea Exchange. On Friday alone, investors traded stocks worth 6.1 trillion won.

The figure marked a high since the KRX created the market in 1996, benchmarking the US tech-heavy bourse Nasdaq. 

Since November, the daily average money flow has been breaking records each month.

In November, investors traded shares worth 6.5 trillion won a day on average. From Dec. 1 to Friday, the comparative value reached 6.6 trillion won. This is also more than double the 3.1 trillion won daily average between January and October.

The Kosdaq’s daily value of traded stocks exceeded that of the top-tier Kospi every day in December until Friday, except on Dec. 12 and Dec. 14.

Retail investors purchased shares worth 764.9 trillion won and sold shares worth 763.7 trillion won this year until Friday, accounting for 90 percent of the total.

The overall trade volume on the Kosdaq from Jan. 1 to Friday came to 176 billion, inching closer to the record-high of 196.8 billion in 2009.

The soaring trade volume, however, did not necessary translate into the upward movement of the Kosdaq.

After peaking at 796.80 on Nov. 23 at the market’s close, the highest since 800.92 on Nov. 6, 2007, the Kosdaq has drifted lower to below-750 territory. On Friday, the Kosdaq closed at 761.20, up 2.82 percent from Thursday’s close.

The drop in December came in part from individual investors’ sell-offs. Retail investors net sold shares worth over 2 trillion won in December through Friday.

Lee Sang-heon, an analyst at Hi Investment & Securities, said the sell-offs stemmed from retail investors’ routine move to become more tax-efficient at the end of each year. An investor holding shares worth over 1.5 billion won is levied at most 25 percent of tax on gains in the stock market, following a tax rule revision in August. Prior to the revision, the rule was applied to investors with over 2 billion won worth of shares.

“The toughened tax rule this year propels an individual investor to decrease the amount of shares he or she holds to reduce tax,” Lee wrote in a Tuesday note. “The individual sell-off offers foreign investors and institutional investors a chance to buy discounted Kosdaq shares.”

Lee added the Moon Jae-in administration’s upcoming revision early next year, designed to give listed firms tax relief and increase pension funds’ influx, will also be a boon to the market.

The Kosdaq boom late this year was largely led by biotech powerhouses such as Celltrion, Celltrion Healthcare, SillaJen, TissueGene, Medy-Tox, Hugel and ViroMed -- all among top 10 firms in market cap. The momentum sent the market index to a 10-year high in November.

Adding to this was the nationwide cryptocurrency frenzy. The phenomenon drove up, or increased the price volatility of, so-called cryptocurrency-themed Kosdaq stocks in December, including investment firms such as Woori Technology Investment and SBI Investment Korea, as well as security solution providers such as Raonsecure and Jiransecurity.

By Son Ji-hyoung 
(consnow@heraldcorp.com)