Korea Exchange

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Korea Exchange (KRX)
Krx.png
Founded 2005
Headquarters Busan, South Korea
Products broad range of listed derivatives
Website http://eng.krx.co.kr

The Korea Exchange (KRX) was formed in 2005 from the merger of four domestic Korean exchanges, but has since grown rapidly. According to a recent Futures Industry Association survey, KRX was the world's leading derivatives exchange measured by trading volume in 2009 after placing third the previous year, and KRX recently established distribution agreements for its KRX KOSPI 200 benchmark index products with its two leading competitors, Eurex and the CME Group.

Background

The KRX was formed on Jan. 27, 2005, from the merger of the Korea Stock Exchange (KSE), the Korea Futures Exchange (Kofex), the Kosdaq Market and the Kosdaq committee, part of the Korea Stock Dealers' Association. It provides an electronic platform for the trading, clearing and settlement of cash equities, bonds and derivatives. Ownership was split in 2007 between 44 financial and government entities, led by Woori Investment Securities (6.3 percent); Daewoo Securities (3.2 percent) and Daishin Securities (3.2 percent). Overseas owners include JP Morgan, Citigroup and Australia's Macquarie Bank.[1]

The Korea Exchange was the world's busiest in 2009, according to the annual Futures Industry Association's survey of the world's leading derivatives exchanges. [2] The FIA report, published in early April, 2010, notes that the number of futures and options traded on the Korea Exchange rose 8.3% on the 2008 figure to hit 3.101 billion, topping larger rivals Eurex and the CME Group. The Korea Exchange's Kospi 200 Options (KRX) also headed the FIA's list of the wold's top-20 equity index futures and options with 2.921 billion options traded, up 5.6% on the 2008 figure.

In mid-2009 KRX announced a program with the Laotian government to establish a stock exchange there in return for a 49 percent stake,[3] marking the third exchange in the Mekong region that the KRX had helped establish. Cambodia will begin construction on its first stock exchange in December of 2009, 49% of which will be held by KRX. The Cambodia exchange plans to launch with four or five companies issuing about $10 million worth of shares each.[4]. KRX has a similar agreement in Vietnam.

Korea Exchange reported in October 2009 that its most capitalized companies have seen their share prices rise by more than 50% since the beginning of 2009.[5] Stocks in the medical sector saw the highest growth at nearly 200% while telecom stocks fell nearly 10%.

Key products

The Korea Exchange's main benchmark stock index is the KRX KOSPI 200 and listed futures and options contracts tied to its value are the world's most-traded derivatives contracts, according to the Futures Industry Association.

Key people

In 2010, Kim Bongsoo became Chairman and CEO of the KRX. He was the former president of Kiwoom Securities Company, one of the member firms of KRX. He took over as CEO after the sudden departure in October 2009 of previous KRX head Lee Jung-Hwan.[6] Lee Jung-Hwan had been at the top job at KRX for only eight months, after joining the exchange in early 2005 as the head of its management strategy division. He had previously worked at South Korea's Ministry of Finance and Economy, spent three years with the World Bank and led the Korean delegation to the OECD.[7]

Key contracts

The following contracts listed on KRX have MarketsWiki entries:

There are no restrictions on foreign individuals trading contracts listed on the KRX.

Joint Ventures

KRX recently consolidated its position in the international derivatives market by agreeing to have its two largest global competitors, Eurex and the CME Group, electronic distribute and allow trading in options and futures respectively on its benchmark KRX KOSPI 200 stock index.


KRX and Eurex announced in mid-July 2010 that from August 30 2010 the pair would trade and clear options on Korea’s blue-chip index KOSPI 200 on Eurex during European and North American trading hours. The two have also been preparing to launch daily futures contracts on KOSPI 200 Options on Eurex, part of the NYSE Euronext group, since the beginning of 2010.[8]. Fifteen KRX members and 16 Eurex members say they will be ready to trade the Eurex KOSPI Product during the course of 2010.[9] IMC and Archelon have signaled their interest to actively quote as market makers.

Latest news

References

  1. KRX 2006 Business Report. KRX.
  2. 2009 Annual Volume Survey. FIA magazine.
  3. S. Korea to help set up stock exchange in Laos. China Post.
  4. Construction of Cambodian bourse to begin in Dec. Forbes.
  5. Rising tide lifts leaders, runners-up. Joongang Daily.
  6. 'Too Many Bureaucrats in KRX'. Korea Times.
  7. Korea Exchange CEO Leads Through Downturn. Wall Street Journal.
  8. Korea Exchange and Eurex Receive Strong Support from Major Market Participants for Their Link. Deutsche Borse Group.
  9. Korea Exchange and Eurex Receive Strong Support from Major Market Participants for Their Link. Deutsche Borse Group.

Resources

External links