Korea Exchange to Develop Eco Index

By Park Hyong-ki

Staff Reporter

The Korea Exchange (KRX) said it will develop an index listing and track companies that engage in production of eco-friendly goods and alternative energy development projects.

This comes as it saw the need to promote such firms amid skyrocketing oil prices, which recently topped $140 a barrel, and support them financially through equity investments and boost their energy-saving projects.

The stock market operator said the ``eco index'' is aimed at not only promoting companies in clean and alternative energy but also raising awareness of the importance of saving energy among consumers.

Eco-companies include those with business interests in biofuel, wind and solar power, and renewable energy.

``The index will be developed in line with plans to establish a social responsible investment (SRI) index,'' said a KRX official.

The exchange initially announced the plan to develop such indices in early 2005 when the stock market operator was launched after an amalgamation of the Korea Stock Exchange, the Kosdaq and the futures market.

Then chief executive Lee Young-tak hoped to create the eco index, consisting of about 20 to 30 companies, while luring firms that exert social responsibility efforts to list on the SRI.

The eco index will be operated under the SRI index. The exchange did not give a specific timeframe on the development of both indices.

``We are continuing our studies by looking into other market operations overseas involving eco index,'' said the official.

He added that the exchange needs to draw up all the potential positives and negatives in creating such an index, given that it is relatively new to the Seoul market. ``Full preparations are needed so that we can receive a positive response from market participants when launching the index.''

The exchange said an evaluating body will assess companies wishing to list as to whether their stocks are fit to be traded on the index.

Also, the KRX will support such companies to list on the tech-loaded Kosdaq market by implementing various incentive measures.

phk@koreatimes.co.kr