Financial industry lobby seeks longer Seoul bourse trading hours

[SEOUL] Trading hours at the South Korean stock market should be extended by an hour at least so that they overlap with other regional markets to encourage more foreign investment, the head of the local financial investment industry association said.

The market currently closes at 3 pm local time (0600 GMT), an hour earlier than mainland Chinese markets and two hours earlier than Hong Kong.

Hwang Young-key, chairman of the Korea Financial Investment Association (KOFIA), told Reuters the organisation's members had asked for the longer trading hours and that he "strongly agreed to the idea". KOFIA has 163 members including brokerages, asset management companies. "Other markets such as Hong Kong remain open until 4 pm local time, and so extending trading hours here will give foreign investors an opportunity to better trade between markets in the region," said Hwang, a former banker.

Foreign investors currently account for 34 per cent of total turnover on the Seoul exchange.

Hwang said he expects local share prices to rise as high as 2,500 points this year, breaking above the record high of 2,231.47 points set in 2011, fuelled by low valuations, record-low interest rates, improved corporate earnings prospects and bigger dividend payouts.

Deposits at money market funds (MMF), an indication of more appetite for riskier investments, have risen 40 per cent from the end of last year to around 115 trillion won (S$144 billion) last week, KOFIA data shows. "The MMF deposits have increased because a lot of investors are waiting for the right time to buy stocks or stock investment funds," Hwang said.

He said local stocks were now trading around 9.4 times their earnings, a level he said was undervalued compared to the 15 to 16 times earnings levels seen in the United States and Britain.

REUTERS