South Korea to Double Share-Trading Limits in Boost for BrokersSeonjin Cha and Sharon Cho
South Korea will double the daily trading range of shares next year as the country seeks to increase the appeal of its $1.3 trillion equities market.
Stocks on the Kospi and Kosdaq indexes will be able to move 30 percent, compared with the current level of 15 percent, Financial Services Commission Chairman Shin Je Yoon said in an e-mailed statement. The regulator is also discussing ways to make the nation’s shares more attractive and will announce detailed plans next month, it said.
“We’re preparing ways to attract funds into the equities market so it can maintain its rally,” Shin told reporters today while visiting the offices of start-up businesses.
While wider trading limits will increase volatility, the change will benefit the nation’s brokerage industry by boosting volumes, according to Heo Pil Seok, chief executive officer of Midas International Asset Management Ltd. The Kospi has gained 1.3 percent this year, lagging behind the 3.3 percent advance by the MSCI All-Country World Index, while the 200-day average trading volume of the Korean gauge fell to its lowest level since 2007 in July.
Korea Exchange is considering longer trading hours after the official close and may increase its six-hour regular trading day within five years to boost liquidity, the bourse said on Jan. 9. The FSC said last month it would extend trading limits next year, without specifying the range.