- The total trading volume for January 2002 recorded 1,702,384 contracts, up 292.1 percent from January 2001.
- A block trade introduced in the USD/KRW F/X market on Dec.10, 2001 has emerged as a new useful risk management tool to investors.
- After experiencing strong gains during the previous week, the KOSDAQ50 futures March contract decreased by 3.61 percent this week.
- The KTB futures market experienced strong gains throughout the week except Monday.
- The USD/KRW currency futures market showed its V-shaped movement this week.
The total trading volume for January 2002 in KOFEX recorded 1,702,384 contracts, up 292.1 percent from January 2001 and up 38.4 percent from December 2001. The January average daily trading volume for January 2002 posted 77,381 contracts, up 19.2 percent from December 2001 and up 66.0 percent against the average trading volume for 2001 of 46,622 contracts.
Additionally, the January total month-end open interest posted its record high of 89,489 contracts, up 113.7 percent from January 2001 and up 40.1 percent from December 2001.
Block Trade for the USD/KRW F/X Futures Emerges As a New Risk Management Tool
A block trade introduced in the KOFEX USD/KRW F/X futures market on Dec.10, 2001 has emerged as a new useful risk management tool to investors. Particularly, institutional investors such as banks, leasing companies have played an important role as major users of the newly introduced hedging tool in the F/X market.
From Dec.10 to Jan.31, 2002, a total amount of 48,038 contracts traded in the KOFEX USD/KRW futures market as block trades, which accounted for 20.8 percent of total volume traded in the USD/KRW F/X market during the period.
KOSDAQ50 Index Futures Market
After experiencing strong gains during the previous week when the lead month contract, KQ203 increased for five days in a row shooting up 9.4 points or 9.54 percent at 107.90 points on Friday, the KOSDAQ50 futures March contract decreased by 3.9 points or 3.61 percent this week. And finally it reached at 104.00 points on Weekend.
Meanwhile, in the local stock markets, both the Korea Stock Price Index (KOSPI) and the KOSDAQ Comp Index experienced the similar losses finishing the week at 742.42 points, down 32.26 percent or 4.16 percent and 75.98 points, down 0.49 points or 0.64 percent from the previous week respectively.
The reasons for the weakness of the KOASDAQ50 futures market are as follows:
- Reaction to the steep increase of the previous week
- Bankruptcy of once flagship venture company, Medison, which specialized in the production of three-dimensional ultrasonic medical scanners and magnetic resonance imaging (MRI) systems as the firm defaulted on a payment for KRW6.6 billion in company checks due Jan. 29, Tuesday
- Weak NASDAQ Market falling 26.46 points or 1.36 percent during the week to reach at 1,911.24 points on Friday
This week, the KTB futures market experienced strong gains throughout the week except Monday. Accordingly, the lead month contract, KTB203 lost by 26 ticks on Monday thanks to the weak US fixed income market and the upturn in the domestic stock markets. After the one-day descent, however, the KTB March futures contract skyrocketed for the next four days of the week increasing by 103 ticks and finally finished the week at 103.96, up 77 ticks from 103.19 on the previous weekend.
The major reasons behind the upward movement are as follows:
- Comment from an official of the Bank of Korea that it's to early to confirm the recovery of economy
- Weak January export and the ignoring of the high-than-expected CPI in January by investors
USD/KRW Currency Futures Market
This week, the USD/KRW currency futures market showed its V-shaped movement. The current month contract USD202 decreased by 16.5 KRW for the earlier three days of the week to reach at 1,313.0 KRW per USD on Wednesday owing to the appreciation of JPY and month-end export settlement. And then it increased by 7.0 KRW for the next two days of the week finishing the week at 1,320.0 KRW per USD, down 9.5 KRW against the previous weekend due mostly to the stronger USD against JPY touching 135 Yen level.
