What’s going on here?
South Korea will extend dollar-won trading hours starting next Monday, aiming to attract foreign investors and bolster its financial market’s global standing.
What does this mean?
Starting next week, South Korea’s dollar-won trading hours will shift from the current 9 a.m. to 3:30 p.m. to a more global-friendly 9 a.m. to 2 a.m. This move is part of President Yoon Suk Yeol’s strategy to include South Korea’s government bonds in the prestigious FTSE Russell’s World Government Bond Index. By doing so, significant portfolio investments may flow into the country. Additionally, dozens of foreign banks have received permits to join the local interbank market, enhancing access for international investors. This comprehensive effort also includes administrative ease for traders using Euroclear Bank SA, who won’t need to report to South Korean regulators.
Why should I care?
For markets: A global gateway opens wider.
Aligning the dollar-won trading hours with major financial hubs means investors from places like London can now engage in real-time trading during their business hours. This increased accessibility could attract more foreign capital into South Korea, making it a more integral player in the global finance scene. Large South Korean banks like Shinhan Bank and KB Kookmin Bank are already staffing up to meet the new demand, indicating strong institutional support for this shift.
The bigger picture: Connecting Korea to the world’s financial pulse.
By aligning its trading hours with global financial centers, South Korea hopes to ease the entry of foreign capital into its markets, making its financial system more attractive to global investors. This could pave the way for its government bonds to be recognized in global indices such as FTSE Russell’s World Government Bond Index, further integrating South Korea into the world’s financial ecosystem and potentially leading to substantial economic benefits.
