Korea Exchange to become listed holding company next year

By Park Sae-jin Posted : January 21, 2016, 18:05 Updated : January 21, 2016, 18:05

[Namkung Jin-ung]



South Korea's sole stock market said Thursday it would proceed with its plan to become a listed holding company by the first half of 2017 to strengthen governance and expand partnership with overseas bourses.

Korea Exchange (KRX) Chairman Choi Kyung-soo said the stock market will firmly lay the groundwork for its proposed initial public offering (IPO) by taking all necessary practical steps beforehand.

South Korea's financial watchdog, the Financial Services Commission, said the KRX holding company will have different subsidiaries housing the main board KOSPI , the tech-heavy KOSDAQ and its derivatives market separately.

Choi offered to extend trading hours of the Seoul bourse by at least 30 minutes in tandem with a global trend and increase its overlap with other markets in the region.

“Currently, the Korean market runs for six hours from 9 a.m., two and three hours shorter than global peers,” he said.

"There is a growing need to globalize the South Korean stock market by overlapping its trading hours with those of other Asian markets, which will require an extension of its own trading hours," he said.

The relatively short operating hours of South Korean currency and stock markets has been cited as a major reason for the country's failure to be included in the top-tier developed market index of Morgan Stanley Capital International (MSCI).

The KRX said Seoul is unlikely to be included in MSCI’s developed market index this year, but said it will try to get South Korea back on the list of countries up for review for inclusion in the index.

South Korea was taken off the review list for the index in 2014, with MSCI citing "absence of any significant improvements in key areas negatively affecting accessibility" for the past few years.

Government sources have said 24-hour trading of the won currency was on the list of requirements that MSCI wants to see before promoting South Korea to the advanced markets index.

South Korea's won is currently traded onshore against the dollar and the yuan in Seoul for six hours on weekdays.

The KRX expectes a great surge in the number of foreign companies to be listed on the local market this year. It has formed a task force to attract top-ranking Southeast Asian firms.

By Alex Lee
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