S Korea Plans Further Market Deregulation

We will further deregulate the markets. We will also raise the foreign ceiling for equities by three per cent every year from 1997 and abolish it by the year 2000, Hong In-kie, chairman of the Korea Stock Exchange, said.

As of October 1, foreign investors can buy up to 20 per cent of total shares in each listed company with an individual ceiling of five per cent.

Hong said since the limit was established, over $600 million in fresh funds had flowed into the market.

Until now, about $16 billion had been invested in the stock market and foreign ownership had reached 13 per cent of total market capitalisation, he said.

 

Hong said this measure and others were the results of Seouls proposed entry into the OECD group of wealthy nations. South Korea was invited last week to join the Paris-based club.

South Korea will be a ceilingless country in the year 2000, Hong said, adding that the bond market would also be opened soon.

The South Korean bond market was initially opened in July, 1995, to foreigners on a limited basis only.

They were allowed to invest in convertible bonds issued by small and medium-sized companies.

Hong said South Korea planned to allow international participation in the bond market.