Markets will stay open 30 minutes moreIn hopes of revitalizing the financial exchange market, the Korean government plans to extend the market’s operating hours by 30 minutes, a rule that is likely to be implemented within the first half of this year.
“Because most of the participants in the stock markets are foreigners, once the market’s operation time is extended, the foreign exchange market should also be extended as well,” said Yoo Il-ho, the nation’s finance minister, during a Sunday meeting with Korean journalists in Washington, D.C., where he is attending the G20 forum for governments and central bank governors. Yoo added that more time does not necessarily mean the market’s volatility will increase.
The foreign exchange market currently starts at 9 a.m. and closes at 3 p.m., the same times as the stock market. But the sole operator of the Korean stock market, Korea Exchange (KRX), has been pushing since January to extend the closing time from 3 p.m. to 3: 30 p.m., as to encourage investors to participate more aggressively on their stock investments while increasing the market’s connection to other Asian markets, including China’s.
During a press conference on Jan. 21, Choi Kyung-soo, the president of KRX, stressed the need to globalize the Korean stock market.
Hana Financial Group’s research institute estimated that once the stock market’s closing time is extended, Korean brokerage firms will be able to generate 349 billion won ($304.3 million) in additional service commission profits, as the daily trading value will likely exceed 690 billion won on average.
The Korean government has for years tried to qualify the local stock market for the MSCI World Index but has repeatedly failed. The index, maintained by MSCI, formerly Morgan Stanley Capital International, comprises equities from 23 countries and territories including Hong Kong, Japan and Singapore.
Currently, MSCI lists Korea in its Emerging Markets Index, which also includes China and Indonesia. In order to be included in the World Index, the operator of MSCI recently told the Korean government, the number of transactions made on the foreign exchange market will first need to increase. The government doesn’t have much time to do this, however, considering that it needs to show some progress by June. Once it makes the lists of candidates, MSCI will closely monitor the Korean market before making its final decision next year.
BY LEE HO-JEONG [firstname.lastname@example.org]