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(LEAD) (Yonhap Interview) KRX chief vows to develop KOSDAQ market

Interviews 09:42 November 15, 2018

(ATTN: ADDS comments, background info in paras 8, 11-13)
By Oh Seok-min

SEOUL, Nov. 15 (Yonhap) -- The head of South Korea's bourse operator has pledged to extend support for the country's tech-laden stock index as a key capital-raising tool for small and innovative business entities.

Jung Ji-won, chief of the Korea Exchange (KRX), made the remarks in an interview with Yonhap News Agency on Tuesday, marking his one-year anniversary of taking office.

"Over the past year, the priority for me and the KRX was to successfully carry out measures to vitalize the KOSDAQ market, and I believe there have been some improvements," Jung claimed.

Under a new policy drive to boost the country's second-tier stock market, the government came up with a bunch of measures earlier this year, such as the easing of some listing rules, beefing up the independence in the market operations and offering tax breaks to individual investors.

On the back of the measures, the daily average transaction turnover has surged 43 percent on-year to 5.3 trillion won (US$4.67 million) so far this year, and the proportion of foreign and institutional investors combined grew 2.7 percentage points to 14.7 percent, according to Jung.

The number of newcomers is also forecast to continue to rise, from 82 firms in 2016 to 99 entities in 2017 and to probably 105 companies this year.

"The index has not been quite good this year due to some external factors. If such unfavorable conditions make a turnaround, however, the market is expected to recover," he said, asking investors to maintain a "long-term perspective."

Along with the top-tier KOSPI market, the secondary market tumbled this year due to external uncertainties, such as the trade disputes between the United States and China, among others. On Wednesday, the KOSDAQ index finished at 671.56, compared with the yearly high of 932.01 logged in January.

In a way to further vitalize the market, the chief vowed to be more proactive in attracting large tech shares and new emerging stars, while making fresh products to lure more offshore and institutional investors.

"To protect investors at the same time, the KRX has strengthened measures regarding accounting rules, and we will continue to sternly oversee the market to prevent any financially unhealthy firms from being in the market," he said.

As for his longer-term plans, the chief pledged to make a variety of index-related products, explore new growth engines by maximizing block chain technologies, and devise supportive measures for the North Korean capital market.

"We set up and have run a team tasked with preparations for a possible opening of a capital market in the North," Jung said.

"When sanctions against North Korea are lifted and inter-Korean ties improve further, I believe we can build on our past experiences of establishing stock exchanges in Cambodia and Laos," he added.

Jung Ji-won, chief of the Korea Exchange (Yonhap)

graceoh@yna.co.kr
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