By Yoon Ja-young
The nation's stock market operator and the government are seeking to extend trading hours of foreign exchange and stocks by 30 minutes in a bid to stimulate the market.
According to securities companies, the Korea Exchange (KRX) has been contacting them to push for the extension, which could start as early as July.
"We are working on extending trading hours, but the details haven't been decided yet," the KRX said in a media release.
Currently, bourses are open for six hours from 9 a.m. to 3 p.m. here, but that is around a couple of hours less than other global major markets. The Singapore bourse is open for eight hours, and those in Germany, the United Kingdom and France are open for eight hours and 30 minutes. U.S. markets trade for six-and-a-half hours.
KRX wants to extend trading to 3:30 p.m., which requires approval from the Financial Services Commission.
If trading time is extended in the stock market, the same will have to happen for the foreign exchange market since foreign investors need to buy Korean won to trade in stocks here. The offshore non-deliverable forwards market, meanwhile, operates for 24 hours.
"The foreign exchange trading time will be extended, in line with the extension of stock trading hours," Strategy and Finance Minister Yoo Il-ho recently said at a G20 meeting.
According to the KRX, the extension will offer a number of benefits. First of all, it will increase trading by between five and 10 percent. Daily transaction on the Seoul bourse averaged 5.4 trillion won last year. The Hong Kong bourse had a turnover increase of 45 percent after it extended trading by one hour in March 2011, while Singapore trading rose 41 percent after an extension.
However, some analysts say that any long-term effect is doubtful, pointing out that trading decreased in Singapore and Hong Kong after a year.
A market analyst who was skeptical about the extension said, "Korea isn't likely to see as much an increase in trade as it doesn't have many high-frequency traders. These investors, who mechanically trade every few seconds to gain small profits, are scarce in Korea due to high transaction fees."
Unions of securities companies have also been opposing the extension, saying it will only increase their workload while there wouldn't be any noticeable positive effect on the bourse.
However, the extension could increase the overlap of the Seoul bourse with major Asian financial markets such as China, Hong Kong and Singapore, helping attract more foreign investors.
The nation's stock market operator and the government are seeking to extend trading hours of foreign exchange and stocks by 30 minutes in a bid to stimulate the market.
According to securities companies, the Korea Exchange (KRX) has been contacting them to push for the extension, which could start as early as July.
"We are working on extending trading hours, but the details haven't been decided yet," the KRX said in a media release.
Currently, bourses are open for six hours from 9 a.m. to 3 p.m. here, but that is around a couple of hours less than other global major markets. The Singapore bourse is open for eight hours, and those in Germany, the United Kingdom and France are open for eight hours and 30 minutes. U.S. markets trade for six-and-a-half hours.
KRX wants to extend trading to 3:30 p.m., which requires approval from the Financial Services Commission.
If trading time is extended in the stock market, the same will have to happen for the foreign exchange market since foreign investors need to buy Korean won to trade in stocks here. The offshore non-deliverable forwards market, meanwhile, operates for 24 hours.
"The foreign exchange trading time will be extended, in line with the extension of stock trading hours," Strategy and Finance Minister Yoo Il-ho recently said at a G20 meeting.
According to the KRX, the extension will offer a number of benefits. First of all, it will increase trading by between five and 10 percent. Daily transaction on the Seoul bourse averaged 5.4 trillion won last year. The Hong Kong bourse had a turnover increase of 45 percent after it extended trading by one hour in March 2011, while Singapore trading rose 41 percent after an extension.
However, some analysts say that any long-term effect is doubtful, pointing out that trading decreased in Singapore and Hong Kong after a year.
A market analyst who was skeptical about the extension said, "Korea isn't likely to see as much an increase in trade as it doesn't have many high-frequency traders. These investors, who mechanically trade every few seconds to gain small profits, are scarce in Korea due to high transaction fees."
Unions of securities companies have also been opposing the extension, saying it will only increase their workload while there wouldn't be any noticeable positive effect on the bourse.
However, the extension could increase the overlap of the Seoul bourse with major Asian financial markets such as China, Hong Kong and Singapore, helping attract more foreign investors.
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