Oricom Signs with Daewoo Securities for Smooth Trading

By Park Hyong-ki

Staff Reporter

Oricom, an advertising company, has signed a contract with Daewoo Securities to designate the broker as a liquidity provider (LP) for smooth trading of Oricom shares on the tech-heavy Kosdaq market.

Under the contract, a brokerage house steps in to make the trading of Oricom shares possible when there is too wide a gap between buy and sell orders. Brokerage houses act as LPs generally for small and mid-cap stocks.

The system not only assists in facilitating the trading of such stocks, but also it reduces investors' burden on trading cost, meaning that it makes them easier to buy and sell stocks, the exchange said.

The Kosdaq market division said Daewoo Securities will serve as a market maker for Oricom, beginning January 14 next year as the Financial Supervisory Commission allowed the market to adopt the LP system last October.

Oricom, a unit of Doosan Group, became the first Kosdaq-listed company to sign an LP contract with a broker.

The Korea Exchange first adopted the LP system in 2006 for the KOSPI market with aims of boosting the trading and stability of illiquid stocks.

It expects more Kosdaq-listed companies to sign up for LPs, considering that Kosdaq stocks are less actively traded than those on the main bourse.

Currently, three securities companies ― Daishin, Daewoo and Hyundai ― provide liquidity in such stocks on the equity markets.

phk@koreatimes.co.kr