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By Kang Yoon-seung
SEOUL, July 1 (Yonhap) -- The Korea New Exchange (KONEX) market was officially launched Monday to foster the growth of young venture firms and lend support to the government's "creative economy" vision, the bourse operator said.
"The new market will provide local venture companies with more leeway in securing investment," said Kim Jin-kyu, an acting chairman of the Korea Exchange (KRX) during the opening ceremony.
"The KRX will make a full-fledged effort to sustain growth of start-up companies by reducing barriers into the stock markets, and easing their heavy dependency on bank loans," Kim said.
The Financial Services Commission Chairman Shin Je-yoon echoed the view, stressing the importance of fostering venture companies amid the volatile global financial market sparked by the slowing Chinese economy and a possible cut in the United States' quantitative easing moves.
"The new market came as creativity emerged as another crucial factor for corporate growth," Shin said. "The KONEX will support companies' growth based on their potential."
The KRX said while it takes 14.3 years on average for a firm to be listed on the secondary tech-heavy KOSDAQ market since its establishment, the KONEX aims to embrace companies which are 10 years or younger.
The bourse operator added its eventual goal is to have firms listed on the new market to attract investments and be relisted on the secondary market within three to four years.
The KRX said the opening also comes in line with the government's "creative economy" vision, which aims to foster the growth of start-up ventures and small firms in the country where conglomerates dominate the economy.
On June 25, the Korea Exchange selected 21 firms to be listed on the KONEX market after reviewing a list of candidates handed in by 10 brokerage houses, which were earlier selected as authorized supervisors by the KRX.
The securities firms are responsible for evaluating and supervising companies to be listed on the new market. All companies listed on the KONEX market must be accompanied by an authorized supervisor.
The first basket of the KONEX market included five bio-technology firms, four chipmakers, three software firms, two auto parts markers, and other firms from various sectors.
The new market is also anticipated to add to the KRX's business portfolio, which currently operates the benchmark Korea Composite Stock Price Index (KOSPI) and the tech-heavy KOSDAQ market.
The bourse operator plans to attract 50 firms with a combined market capitalization of 1.5 trillion won on the new bourse by the end of this year.
Only institutional investors or an individual with an deposit above 300 million won (US$263,273) will be allowed to participate in the KONEX market. The minimum amount of a transaction is 100 shares.
The KRX, however, added it will not announce the index of the new market for the time being, as it takes time to compile enough data to compute a reliable number that reflects the market.
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