After 60 years in operation, South Korea’s bourse has become the world’s 14th-largest stock exchange and is now eyeing to sharpen its global competitiveness by overhauling its centralized operation system. 

Launched in 1955 to trade shares of just 12 listed companies, Korea Exchange, the sole securities exchange operator, now lists over 1,927 companies, including 770 on the main board KOSPI and 1,157 in the tech-laden KOSDAQ with a market cap of more than $1.23 trillion.

“Korea’s stock market has been developed as a venue of asset management, averaging 60 trillion won ($48.9 million) in daily trading value,” Korea Exchange chairman Choi Kyung-soo said. 

The country’s rapid economic growth brought a drastic transformation to the bourse operator, which will hold a ceremony to mark its 60th anniversary on Thursday,

“Korea’s advanced investment environment, in which stock and derivatives markets created a balanced development, has become a benchmarking object for emerging markets,” Choi said. 

Foreign investors’ stock ownership surged to 31.9 percent last year, up from 4.9 percent in 1992. Although the figure has been steadily decreasing after hitting a record high of 42 percent in 2004.

Now it seeks to go beyond its traditional role of managing and operating equity markets by diversifying its business portfolio with new services and products to compete with global peers.

At the beginning of the year, the Korea Exchange announced its plan to set up its holding firm and go public. But the plan has been delayed as a bill to revise the Capital Market Act is currently pending at the National Assembly.
If realized, the holding company is expected to oversee three subsidiaries in charge of the main stock exchange, the secondary bourse for small and mid-sized firms, and the derivative market for futures and options.

By Park Han-na (hnpark@heraldcorp.com)