SAN JOSE, California ― The Korea Exchange, the country’s main bourse, is pushing to list more foreign companies in the Korean stock market, it stressed during an investor relations session in the United States last week.

“The global IPO market is picking up after staying down for the past couple of years,” said Choi Hong-sik, president of the tech-heavy KOSDAQ division at the Korea Exchange.

He was speaking on the sidelines of KRX’s “2013 U.S. Companies Listing in Korea Forum,” held at the Fairmont San Jose Hotel in Silicon Valley.

He recalled that decades ago, the chairman of the London Stock Exchange directly contacted fast-growing Korean firms like Samsung Electronics and Korea Electric Power Corp. to list on the British bourse.

“Now it is time that we did the exact same thing on foreign soil,“ he told The Korea Herald. 

Some 70 executives of U.S. companies, mostly venture capital, tech and renewable energy companies, as well as big-name accounting and pharmaceutical firms attended the forum.

“For now we are trying to convince them how we make Asia’s No. 3 trader and have terrific industry profiles, especially in the high-tech sectors including bio, computer, health care and renewable energy,” he said.

KRX boasts the world’s fifth-highest return rate, beating London and Hong Kong, and is ninth largest in trading value and the number of listed companies, outperforming Hong Kong and Singapore.

Choi acknowledged that the KRX is in the initial stage of attracting foreign companies to the Korean IPO market. Only 15 foreign firms, mostly Chinese, are currently listed on the Korean equity markets, whereas about 40 percent of the companies listed on the Singapore Stock Exchange are foreign-based.

“I personally hope that we could eventually raise the ratio of foreign companies listed on the Korean stock market up to about 20 percent of all companies listed in Korea,” he noted.

One of the fastest ways to attain the goal is allowing foreign companies to post public disclosures in English, he stressed. The current system only allows them to be stipulated in Korean.

On his first day in San Jose, Choi visited two U.S. companies, one engaged in commercial refrigerators and the other in credit card payment systems, which were close to sealing deals. Eleven firms in Washington, D.C., are also in talks with the KRX.

Two or three U.S. firms are expected to be listed in the Korean stock market by the second half of next year, said another KRX official.

The KOSDAQ, a Korean benchmark against the NASDAQ, is one of the fastest-growing markets in the world for small and medium-sized enterprises. The market capitalization grew 17.4-fold since 1997, from $6.6 billion to $115.2 billion, KRX’s data showed.

Some foreign executives at the forum said it is difficult for them to distinguish the KONEX, which launched on July 1 for small firms, from the KOSDAQ.

Choi pointed out that the KONEX acts as a launch pad for companies that seek listings on the KOSDAQ. The KONEX was aimed at helping high-potential small and medium enterprises to attract funds more easily from individual and institutional investors.

Tom Sabourin, chief operating officer of U.S.-based Alternative Energy Solutions, was one of the U.S. attendees who saw the KONEX as a unique hybrid of venture capital and crowd-funding.

“In the U.S., the venture capital model is being challenged. Now it is difficult for a lot of venture capitals to get the private equity funds, whereas they have been the standard procedure (for business start-ups),” said Sabourin, who is also a board member of Access Bio, a U.S. firm that listed on KOSDAQ on May 30 this year.

“Europe is even worse than in the U.S. Small companies are dying, because they are not able to get (funds). So I think (the KONEX) is an opportunity to do this,” he added.

By Chung Joo-won, Korea Herald correspondent 

(joowonc@heraldcorp.com)