Korea Exchange is planning to export its trading platform and associated IT infrastructure to the Middle East and North Africa, said KRX chairman and CEO Choi Kyung-soo.
By Arno Maierbrugger/Gulf Times Correspondent/Bangkok
Korea Exchange (KRX), the sole securities exchange operator in South Korea headquartered in the country’s second largest city of Busan, said it has plans to expand further into Southeast Asia and Central Asia and eventually to the Middle East and North Africa with its own trading platform and through buying stakes of frontier market stock exchanges.
According to KRX Chairman and CEO Choi Kyung-soo, the exchange wants to “accelerate its growth” by investing into smaller stock exchanges and deliver its technological expertise in electronic trading platforms. KRX is already a stakeholder in the Lao Securities Exchange (49%) and the Cambodia Securities Exchange (45%), seeking to build up capital markets in both countries. Furthermore, this February, the KRX ensured a deal to modernise the Baku Stock Exchange in Azerbaijan. Last year, it signed a deal with the government of Uzbekistan for the modernisation of the Uzbek bourse, the Tashkent Republican Stock Exchange. As per a memorandum of understanding signed with the government of Uzbekistan, the KRX is also expected to become a shareholder of the Tashkent stock exchange by acquiring 25% of the equity capital.
According to Kyung-soo, the KRX wants to export its trading platform and the associated IT infrastructure also to the Middle East and North Africa. Last year, the KRX announced a memorandum of understanding with the Dubai Mercantile Exchange, the largest energy futures and commodities exchange in the Middle East, to develop a trading ecosystem for commodity futures contracts, in particular for crude oil. Also last year, a Qatari delegation led by central bank Governor HE Sheikh Abdullah bin Saud al-Thani visited the KRX to study the technical facilities of its trading system.
Expansion of the KRX began in 2008 when it set up infrastructure for the Malaysian stock market in a deal with Bursa Malaysia for a bond transaction and supervision system, followed by a market-maker monitoring system and an Islamic financial products transaction system in 2009, as well as a derivative product settlement system in 2012.
In the same year, KRX signed a deal with Vietnam to set up a next-generation stock market system and market surveillance system for both exchanges in Ho Chi Minh City and Hanoi. It also implemented a market surveillance system for the Philippine bourse in Manila, and there have also been contacts with Ulan Bator to upgrade the stock exchange trading system of the Mongolian Stock Exchange. In January 2015, the KRX entered a contract with the Thai Securities and Exchange Commission to install a market surveillance system for the Stock Exchange of Thailand.
The KRX said it will start marketing its IT infrastructure and trading system expertise this year in other “relevant countries” including in the Middle East and North Africa, particularly with its new trading platform developed in-house called Exture+, which it sees as the “Asian response” to globally dominant trading systems like the New York Stock Exchange’s and Euronext’s Universal Trading Platform, NYSE Arca or the London Stock Exchange’s Turquoise system.
Through its expansion drive, the KRX said it plans to generate some $275mn annually in export sales of its trading platform and related IT infrastructure.
