Seoul: South Korea will have to extend its stock trading hours, the head of the country's main bourse operator has said, calling it an "inevitable" move to keep up with global trends and boost the local stock market. Jeong Eun-bo, chief of the Korea Exchange (KRX), made the remarks in an exclusive interview with Yonhap News Agency on Monday.
According to Yonhap News Agency, Jeong stated that extending the trading hours is necessary to align with major global exchanges. The New York Stock Exchange and the tech-heavy Nasdaq have announced plans to introduce a 24-hour trading system next year, driven by growing demand for U.S. equities. Jeong emphasized that Seoul must also extend its own trading hours but noted challenges such as building additional IT infrastructure and opposition from the unionized workers of KRX.
In a related development, the KRX chairman mentioned ongoing discussions to reduce the settlement period for security transactions from the current T+2 system to a T+1 system, which he indicated would align with global trends. These comments come amidst a bullish run in South Korea's stock market, with the benchmark Korea Composite Stock Price index (KOSPI) reaching an all-time high of 3,486.19 points on Tuesday, marking a new high for the second consecutive day.
Boosting the local stock market is one of President Lee Jae Myung's key initiatives. He has previously committed to efforts aimed at lifting the country's primary stock gauge to 5,000, partly by enhancing transparency in the local capital market. Jeong expressed hope for a future where the KOSPI could reach 10,000, attributing the recent bull market to a successful transition of the country's industrial structure and government support in addressing the "Korea Discount" - an undervaluation of local stocks compared to global peers.
Jeong also hinted at potential restructuring of the stock market to enhance transparency. He argued that there are too many companies listed on the KRX, suggesting that companies without viable business models should be expelled to maintain market stability and prevent unfair transactions. He cited Japan's market division into three tiers as a model, where companies can be downgraded or removed if they do not meet specific criteria.
Amid global concerns over the rise of private financing, Jeong noted that KRX is exploring new income avenues, including crypto-based exchange-traded funds (ETFs) and fractional investments. Regarding the future of South Korea's stock market, Jeong asserted that a successful transition into high-tech manufacturing industries and knowledge-based services will be critical for maintaining global competitiveness.
He concluded by noting that as South Korea's per capita national income exceeds US$36,000, traditional manufacturing businesses may struggle to remain competitive globally. Therefore, a swift industrial transition is essential for the stock index to reach 5,000.