KRX aims to boost trading time
Korea Exchange (KRX) will work on extending daily trading time by 30 minutes, saying that its relatively shorter hours limit trading opportunities, the nation’s securities exchange operator said Thursday.Currently, the Korean markets operate for six hours a day, opening at 9 a.m. and closing at 3 p.m.
This is two to three hours shorter than markets in other advanced economies like Singapore and some European nations. Singapore’s market runs for eight hours, and those in Germany and the United Kingdom trade for eight and a half hours.
“As the position and significance of Asian economies like China, Singapore and Hong Kong on the global stage is getting higher, it is time for us to follow the global trend of boosting transactions by extending hours,” KRX CEO Choi Kyung-soo said at a new year press conference on Thursday. “The KRX has already reached consensus with the financial regulator and our member securities firms.”
Choi also said shorter trading hours make securities prices less accurate, because events happening after the markets close are reflected late on each stock’s price the next trading day.
KRX will be able to extend trading hours within the year if it figures out how to reconfigure its employees’ working hours, he added.
The operator had pushed to extend hours in 2014, but the attempt failed because of opposition from some in the securities market, who said longer trading hours do not necessarily lead to either more transactions or profits for the firms. The KRX union also opposed it because of the increase in working hours.
The KRX is also aiming to perk up the markets and keep foreign money from pulling out by bringing in more overseas securities products and listing more local companies, Choi said.
It will attract blue chip companies from other parts of Asia, as well as other advanced economies, to list on the Korean securities market as a means of reducing the outflow of foreign capital and offer local investors broader investment options.
In the local derivatives market, the KRX will work on including the futures of global companies like Apple and Google, as well as the derivatives that follow major overseas indices.
The KRX also plans to implement a payment system in U.S. dollars in local markets within the first half. The system will begin in the derivatives market, and will subsequently be extended to the bond market. If successful, other payment systems in other currencies like the yen, euro and yuan will follow, a KRX official explained at the press conference.
The KRX forecast that 2016 will be another big year of initial public offerings (IPOs), as major conglomerates are currently working towards going public on the benchmark Kospi. IPO transactions in the local market reached a 13-year high last year, with 190 companies going public.
“In the early 2000s, we saw seven foreign companies go public in the Korean market within a year. I think this year, we’ll break this record,” Choi said.
BY KIM JI-YOON [kim.jiyoon@joongang.co.kr]
with the Korea JoongAng Daily
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