The Korea Exchange (KRX) plans to introduce a stock split for high-priced stocks. Stocks with a par value of KRW 500 or less currently account for 94% in the KOSDAQ market and 45% in the KOSPI market. The proportion of trading by individual investors and the turnover ratio of high-priced stocks are 31.2% and 0.17%, respectively, compared to 83.7% and 0.8% recorded in the overall KOSPI market.
In order to boost the trading of low liquidity stocks, the KRX will introduce and designate a market maker which will provide liquidity for stocks where trading is inactive.The exchange also plans a Korean version of the Dow Jones Industrial Average. The new price-weighted index will differ from the market value-weighted KOSPI 200. It will incorporate a price level and trading volume in the constituent criteria for index inclusion, in addition to the existing market value and sales.
The KRX will review the criteria for constituent selection, index calculation methods and index name in detail and complete the development of the index by the first half of 2015.