S. Korea's third bourse yet to become startup incubator

South Korea's third bourse has sharply grown in terms of turnover and the number of players since its launch but has not properly achieved its mission of serving as an incubator for startups, experts said Monday.

The Korea New Exchange was launched in July 2013 to help fund young businesses and small firms, an addition to the main bourse KOSPI and the tech-laden KOSDAQ market.

Starting with 21 companies, the third exchange now has 75 whose combined market value amounted to 2.82 trillion won ($2.54 billion) as of Monday, according to the Korea Exchange, the main bourse operator.

The daily turnover of the KONEX has averaged 2.27 billion won in June, rising more than fivefold compared with July 2013, it said.

The third bourse grappled with thin trading in the first year, but it has drawn more investors lately after the government rolled out a series of deregulatory measures and the bourse operator expanded after-hour trading for block deals in November to revitalize the market.

"Investors in the KOSDAQ market have shown growing interests in the KONEX on expectations that easier access will boost turnover," said Lee Hyun-hee, a Hyundai Securities researcher.

Starting next month, the financial regulator will reduce the minimum investment requirement for retail investors by a third to 100 million won.

The KRX also plans to speed up the preliminary review process to encourage more companies to join the market. Only eight firms went public this year, falling far short of the KRX's target of 100 firms. 

Market watchers say more trading by retail investors is needed to help enliven the market, while expressing concerns over a lack of information on startups.

Last year, local brokerage houses published only a dozen reports on companies listed on the KONEX. (Yonhap)