Going Public
New light is being shed on the equity value of the Korea Exchange (KRX) shares owned by Korean securities companies, which are the largest shareholders of the KRX, as the corporation is scheduled to go public after the adoption of a holding company structure.
As of the end of last year, securities and futures trading companies owned more than 88 percent of KRX shares. The others were divided into the treasury stocks of the KRX (4.62 percent) and those of the Small Business Corporation (3.03 percent), the Korea Securities Finance Corporation (2.12 percent), and the Korea Financial Investment Association (2.05 percent).
Each company is expected to be able to gain 100 billion won (US$89 million) or so once the KRX goes public as planned and it turns the shares into cash. Although the total capital of the KRX is 100 billion won (US$89 million), its current value is estimated at approximately 3 trillion won (US$2.7 billion), given that the value per share is at around 140,000 won (US$125).
Smaller stock firms with poorer financial conditions are expected to benefit more from the IPO. It can encourage clearing by major stockholders in those firms where the equity value is closer to the market cap, which can lead to more M&A deals in the industry.