KRX to attract big tech firms to minor bourse
Korea Exchange (KRX) said Tuesday that it will seek to attract big technology companies to the KOSDAQ to invigorate the minor bourse which has suffered from a lack of interest from foreign and institutional investors.
The state-run securities agency said that it will follow the NASDAQ model which has been successful by luring large-scale renowned technology firms such as Apple, Google and Facebook.
Analysts say this is part of the agency’s efforts to boost the market as it would benefit from the inclusion of some big players. The absence of trademark companies deters institutional and foreign investors.
“We will spare no efforts to attract big-sized high-end technology companies. We hope the newcomers will energize the market,” said Kim Bong-soo, head of the bourse operator.
The secondary KOSADAQ will opt to embrace more firms for listing, targeting those with cutting-edge technology and substantial potential to grow but which are short of capital, it said.
The market will focus to list blue-chip, IT-related public companies or foreign firms and develop relevant indices to attract investors, according to the KRX.
The plan comes after the country's financial regulator recently announced it is preparing to launch a new stock market for small and mid-sized companies.
In early April, the Financial Supervisory Service, the country's financial watchdog, said it is in the process of opening the Korea New Exchange (KONEX) within this year to better support smaller firms raise capital.
While the country's main stock market will continue to rely on medium and large cap firms, the KOSDAQ and the KONEX will serve to foster the growth of small and mid-sized companies, the KRX said.
With such a three-track initiative, the stock markets will hope for more balanced growth and enhance sales, and investment from institutional investors here and abroad, the bourse operator added.
The tech-laden KOSDAQ first opened in 1996 in Korea in the wake of a boom in the information technology sector, but its size has dwindled to a market cap of less than 3 percent of the KOSPI as of the end of last year.