[THE INVESTOR] South Korea has extended the trading hours of its stocks and foreign exchange markets by 30 minutes starting Aug. 1 in a bid to attract investment.

Markets trading in stocks, currency and gold will close at 3:30 p.m. 30 minutes later than the current 3:00 p.m., while the derivatives market will close at 3:45 p.m., instead of the current 3:15 p.m. 

It marks the first time in 16 years for the Korea Exchange to revise its trading hours. In 2000, the bourse operator abolished the one-hour lunch break.

KRX expects the lengthened hours to boost equity-trading volumes by up to 8 percent and help synchronize them with other Asian markets.

The move comes as liquidity has been stagnant over the past decade with daily trading value of around 4 trillion won (US$3.40 billion) to 5 trillion won.

Unlike KRX’s expectations, some experts said it will be hard to see a liquidity boost effect with the 30 minute extension.

“Other conditions such as deregulation of stock trade-related rules and more dividends need to be carried out along with the longer trading hours to bring positive fundamental changes to the markets,” said Kong Won-bae, an analyst at Eugene Investment & Securities.

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