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The nation’s main stock operator Korea Exchange is gearing up to issue an initial public offering and become a financial holding company as part of its efforts to bolster global competitiveness.
Since it was delisted from the public entity list in January, the KRX has announced three key strategies ― to grow into a leading exchange through alliances with global stock operators, to secure financing through overseas mergers, acquisitions and joint ventures, and to diversity its business portfolio.
“These days, the global stock industry is led by listed exchanges, which account for 79 percent of the total profits and 77 percent of the market capitalization,” said an official from the Korean bourse.
“Going public and adopting a holding company system is the only way to diversify the business and pull up profits.”
Since April this year, Japan Exchange has been operating a cross-trading system with the Stock Exchange of Singapore, in which it owns a 4.99 percent stake. It also established a joint venture in Myanmar, aiming to open business in the emerging Asian market.
Since its creation in 2013 with the merger of the Tokyo Stock Exchange and Osaka Securities Exchange, JPX has existed as a holding company.
Also, the stock exchanges of Singapore and Shanghai ― both listed companies ― have recently been signing business agreements with European counterparts.
In contrast, KRX has been trapped in a box for years, while profitable Korean information technology companies have been turning their eyes to overseas listings. Its net profits and return on equity last year were 18 percent and 4 percent, respectively, visibly lower than in Singapore, Hong Kong and Japan.
The Financial Services Commission is currently working on revising the capital market law in order to convert the KRX into a holding company and its individual markets such as the benchmark KOSPI and the tech-laden KOSDAQ into affiliated companies.
“Should the related law obtain parliamentary approval, the first thing to do is to seek a cross-listing system with leading global exchanges such as the Chicago Mercantile Exchange and EUREX,” said the official.
By Bae Hyun-jung (tellme@heraldcorp.com)
Since it was delisted from the public entity list in January, the KRX has announced three key strategies ― to grow into a leading exchange through alliances with global stock operators, to secure financing through overseas mergers, acquisitions and joint ventures, and to diversity its business portfolio.
“These days, the global stock industry is led by listed exchanges, which account for 79 percent of the total profits and 77 percent of the market capitalization,” said an official from the Korean bourse.
“Going public and adopting a holding company system is the only way to diversify the business and pull up profits.”
Since April this year, Japan Exchange has been operating a cross-trading system with the Stock Exchange of Singapore, in which it owns a 4.99 percent stake. It also established a joint venture in Myanmar, aiming to open business in the emerging Asian market.
Since its creation in 2013 with the merger of the Tokyo Stock Exchange and Osaka Securities Exchange, JPX has existed as a holding company.
Also, the stock exchanges of Singapore and Shanghai ― both listed companies ― have recently been signing business agreements with European counterparts.
In contrast, KRX has been trapped in a box for years, while profitable Korean information technology companies have been turning their eyes to overseas listings. Its net profits and return on equity last year were 18 percent and 4 percent, respectively, visibly lower than in Singapore, Hong Kong and Japan.
The Financial Services Commission is currently working on revising the capital market law in order to convert the KRX into a holding company and its individual markets such as the benchmark KOSPI and the tech-laden KOSDAQ into affiliated companies.
“Should the related law obtain parliamentary approval, the first thing to do is to seek a cross-listing system with leading global exchanges such as the Chicago Mercantile Exchange and EUREX,” said the official.
By Bae Hyun-jung (tellme@heraldcorp.com)
