KRX to extend stock trading hours from August

Korea’s stock market operator will extend trading hours of the stock and derivatives markets by 30 minutes from August, in a bid to synchronize them with other Asian markets, Korea Exchange said Tuesday.

The bourse operator said the markets will be open from 9 a.m. to 3:30 p.m., aiming to invigorate the sluggish equity market. 

“The Korean equity market is increasingly exhibiting strong correlation with the Chinese stock markets, but Korea’s relatively early closing makes it hard for investors to react swiftly to information from mainland China,” Kim won-dae, the head of the securities market division at KRX, told reporters in a press conference.

While the Seoul bourse closes at 3 p.m., China, Hong Kong and Singapore stock exchanges are open until 4 p.m., 5 p.m. and 6 p.m. Korean time, respectively.

Lengthening the trading hours of the Korean bourse will lead to an extension of the foreign exchange market, which is currently pegged to the stock market, Kim said.

Under the plan, the derivatives market will kick off at 9 a.m. and end at 3:45 p.m. The change will take effect Aug. 1.

If the stock trading hours get stretched, the market liquidity will be boosted by 260 billion ($218 million) to 680 billion won, according to KRX.

“The average daily trading value of Korean equity market has stagnated between 4 to 5 trillion won over the past decade due to a lack of momentum for market growth,” Kim said.

The move comes ahead of MSCI’s annual review to decide on the potential inclusion of Korea in its developed market index.

Industry experts said the move to extend trading hours is linked to MSCI’s stipulation that there should be 24-hours trading of the Korean won.

However, Kim denied any correlation.

“We have been pushing for the extension of trading hours since 2014. It’s got nothing to do with MSCI,” he said.

KRX’s earlier moves in this direction had suffered setbacks as it drew skepticism from securities firms and its own union workers. They said the extension would only add extra working hours with no liquidity boost effect.

By Park Han-na (hnpark@heraldcorp.com)