New Korea Exchange CEO vows to offer tailored services for listed firms to enhance value

Jeong Eun-bo, the new CEO of the Korea Exchange (KRX) said Thursday, that he will offer tailor-made services for firms listed on the three KRX-operated bourses — the KOSPI, the Kosdaq and KONEX — in line with the government’s efforts to boost undervalued stocks.

During his inauguration ceremony at KRX headquarters in Busan, Jeong also said that the KRX will push to restore investor trust in trading.

The related areas include initial public offerings (IPO) and short selling, both of which have often been described, by retail investors, who have increased greatly in number, as being unfair or even fraudulent.

“The KRX must serve its central role faithfully concerning the 'Corporate Value-up Program' and push ahead with the relevant tasks,” Jeong said.

Initiated by the Financial Services Commission (FSC), the program is aimed at tackling the much-maligned Korea discount — the phenomenon where South Korean stocks tend to trade at lower valuations compared to similar companies in other developed countries.

The FSC first announced the general plan for the program in mid-January and will release details this month, in consultation with the KRX and other involved parties.

“The KRX will offer support for the Corporate Value-up Program to last mid-to long term, and to do so, I will make sure to provide customized services that listed firms need at the KOSPI, Kosdaq and KONEX.”

The KOSPI is the main bourse of the KRX, with larger domestic and international companies such as Samsung Electronics, LG Energy Solution, SK hynix and Naver.

Kosdaq consists of venture and small and medium-sized companies, and KONEX is made up of smaller startups that want to raise capital.

Concerning fair market practices, Jeong said that he will begin with IPOs, the process of offering shares of a private corporation to the public. Some companies inflicted losses on investors by exaggerating their earnings.

Short selling refers to the practice of borrowing shares whose value they expect will fall and selling them at the market price. After the stock prices fall as they expected, they buy back the shares and return them, thereby reaping a profit.

"The KRX will closely monitor the market to make a level playing ground for every investor," Jeong said.