INTERVIEW Innovative service sectors to power industrial shift toward 'KOSPI 5,000': KRX chairman

Korea Exchange (KRX) Chairman and CEO Jeong Eun-bo speaks in an exclusive interview with The Korea Times at KRX's Seoul office in the financial district of Yeouido, Aug. 28. Korea Times photo by Choi Won-suk

By Yi Whan-woo

• Published Sep 5, 2025 12:00 PM KST
• Updated Sep 5, 2025 7:45 PM KST

Jeong vows to crack down on 'zombie companies,' unfair practices

Korea Exchange (KRX) Chairman and CEO Jeong Eun-bo sees a sweeping industrial shift led by the innovative service sectors as key to propelling the benchmark KOSPI to an unprecedented 5,000 points.

These promising sectors leverage knowledge, while supporting and integrating with manufacturing, to move away from decades of reliance on traditional brick-and-mortar businesses, according to Jeong.

To this end, the chairman reaffirmed his commitment to crack down on underperforming “zombie companies” and promised to root out persistent unfair trading practices which have significantly contributed to the undervaluation of Korean equities.

“We need to boldly pursue industrial structural transformation, as it is becoming increasingly difficult for traditional manufacturing industries to stay competitive,” Jeong said in a recent exclusive interview with The Korea Times, marking the midpoint of his three-year term that began on Feb. 15, 2024.

The push for change under Jeong’s leadership is in line with President Lee Jae Myung’s call to elevate the KOSPI to the 5,000-point milestone as part of a broader economic initiative aimed at shifting household investment away from real estate and into the equities market.

Manufacturing companies accounted for nearly 70 percent at their peak of all KOSPI-listed firms — a stark contrast to the U.S. market, which is led by tech giants like Nvidia, Microsoft, Apple, Google, and Amazon.

These firms focus on knowledge-based, intangible services while outsourcing manufacturing to overseas partners.

“Likewise, I believe we should move toward service industries that support and integrate with manufacturing because there is no alternative,” Jeong said, listing the defense, space, nuclear power and entertainment industries as examples.

He also noted that traditional manufacturing sectors like shipbuilding can be revitalized with higher-value products, such as shifting from bulk carriers to container ships, liquefied natural gas carriers, warships and cruise ships.

“When you understand that, you realize we should stop producing goods the old way,” he said.

KOSPI 3,300 in sight

As a stepping stone toward the 5,000-point milestone, Jeong expressed hope that the KOSPI will this year surpass its all-time closing high of 3,305.21 points, set on July 6, 2021.

He noted that the market rose nearly 30 percent in the first half of 2025 compared to the start of the year, pushing the KOSPI above the 3,000-point threshold in July for the first time in three and a half years.

Since then, the index has hovered around the 3,200 level or slightly below it, which Jeong described as “a consolidation phase laying the groundwork for the next move upward.”

“In that context, I think the market is now in a period of adjustment and stabilization,” the chairman said. “If we can continue building a solid base around the 3,200 level, I believe reaching 3,300 is well within reach this year.”

To boost investor confidence, Jeong highlighted that the Corporate Value-up Program, which took effect in 2024, encourages companies to enhance transparency in management by openly communicating their long-term strategies to increase shareholder value and maintain consistent engagement with investors.

The chairman also reiterated his commitment to removing so-called zombie companies — firms unable to cover their interest payments on loans for three consecutive years — from the market.

“I believe a natural delisting process should take place for companies that receive opportunities but fail to realize their potential, enabling a virtuous cycle to be continuously created,” he said.

Jeong also pointed out that zombie companies have contributed to an excessive number of listings on both the KOSPI and the secondary Kosdaq bourse.

Currently, more than 2,700 companies are traded across the KOSPI and Kosdaq, whereas the U.S. — with a market capitalization roughly 30 times larger and a gross domestic product about 15 times greater than Korea — has around 5,500 listed companies.

He dismissed concerns that delisting could negatively impact industries. Instead, he viewed it as a lesson for companies to improve themselves and potentially return to the market.

“Even if delisting is inevitable, some companies create new revenue models and earn the opportunity to be listed again,” Jeong said, noting that the KRX operates K-OTC, a platform where unlisted companies can be traded for a certain period.

The chairman emphasized that removing zombie companies is crucial to rooting out unfair trading practices, a priority underscored by President Lee’s “one strike, you're out” policy, which mandates lifetime trading bans for violators.

Jeong further underlined the importance of the recently launched joint task force comprising the KRX, the Financial Services Commission and the Financial Supervisory Service.

“The key lies in how efficiently the three can collaborate and streamline their roles within this functional separation of responsibilities," he said.

Fast-growing ATS

Jeong expressed a positive outlook on the fast-growing alternative exchange system (ATS).

“A competitive trading environment has now taken shape, shifting from a single-exchange system to a multi-venue market,” he said.

The rapid growth of Nextrade, the country's first ATS launched March 4 to break KRX’s decades-long monopoly, has exceeded expectations.

The daily trading value on Nextrade accounts for nearly 50 percent of that of the KRX. The number of traded stocks also increased from 10 to more than 800, including top-performing companies on both the KOSPI and Kosdaq.

“I believe the ATS and the resulting competition is a positive development, because markets must have competition; without it, inefficiencies are inevitable,” Jeong said.

The chairman also highlighted KRX’s initiative to extend trading hours from the current six and a half hours to 12 hours, matching Nextrade’s schedule. The move corresponds with international trends toward nearly around-the-clock trading, as seen in Nasdaq’s planned expansion.

While Jeong acknowledged that longer trading hours would increase labor costs and other financial burdens, he remained optimistic.

“Nevertheless, there is no reason to delay this plan, as the additional labor costs will be outweighed by increased revenue,” he said.

Crypto ETF

Regarding the rise of decentralized finance (DeFi), Jeong urged Korean businesses to seize opportunities by leveraging decades of expertise in pioneering related products.

DeFi is a groundbreaking alternative to traditional financial systems, enabling individuals, businesses and other entities to engage in direct peer-to-peer transactions. Its aim is to reduce reliance on centralized institutions by using blockchain technology.

“I suggest we take the lead, which I believe is possible,” the chairman said. “When such technologies emerge elsewhere, we have been among the fastest in the world at commercializing and productizing them. That’s how we've generated added value as a nation.”

Addressing the challenges faced by KRX as a centralized institution, Jeong said he has been advocating for the introduction of exchange-traded funds (ETFs) that invest in decentralized cryptocurrencies such as bitcoin.

While such crypto ETFs are already traded on traditional U.S. exchanges, Korea currently lacks relevant regulations.

“By listing virtual assets in the form of ETFs, we can enable them to be traded in a more structured and regulated manner. I believe this could generate new added value,” he said.

Jeong said ETFs tied to virtual assets “could create a new revenue model,” emphasizing the importance for centralized exchanges to “secure a position correspondingly.”