Restructuring Securities Industry
The Korea Exchange is planned to be classified as a non-public institution for the first time in six years. This is expected to help smaller securities firms’ business restructuring.
If the Korea Exchange goes public, the equity value of the stock firms that have its shares can be increased, and the smaller ones in financial difficulties are likely to be put on the market.
At present, the value of the Korea Exchange shares owned by small stock companies is not fully reflected in their corporate value. However, this can be addressed once the Korea Exchange is listed, which means changing hands can become a lot easier for them.
“The smaller stock firms are likely to be put under more pressure this year regarding revised net capital ratio regulations,” Kyobo Securities analyst Park Hye-jin explained, adding, “It is expected that more and more firms will opt for liquidation instead of going on with their business after the value of their Korea Exchange shares are subject to proper evaluation.”
She continued, “It seems that the cancellation of the designation as a public organization is to prepare for an IPO, and the reclassification will lead to the agency’s greater efforts for a higher corporate value with a wider elbow room ensured.”