The proportion of foreign firms on the South Korean stock market is relatively small compared with other Asian equity markets, which is largely due to the local stock market’s low global reputation and strict listing rules, data showed Thursday.
Only 17 firms out of 1,822 companies listed on the main bourse and the secondary market, or 0.93 percent, were foreign-based as of end-November last year, according to the data by the Korea Exchange and the Korea Capital Market Institute.
The Korean markets trailed far behind other Asian peers in the percentage of foreign firms listed. The comparable figures for the Singapore Exchange and the Taiwan Stock Exchange were 40.1 percent and 5.76 percent each in the same period.
The Korean stock market lacks a flexible listing procedure, the institute said. The initial offering price for a firm wishing to be listed is far too low, it said, while another strict requirement is a compulsory 10 percent investment by an underwriter.
Another reason foreign firms choose not to list themselves in Korea is because of geopolitical risks from North Korea, the think tank said.
As part of efforts to bolster listings by overseas companies, the KRX said it plans to add six or seven foreign firms to the bourse this year.
Japanese brokerage SBI Mortgage and Chinese pulp maker China Green Paper and Packaging have been approved to be listed, with a few more firms from Australia and the U.S. undergoing the evaluation process, the bourse operator added.
