S. Korea can attract more foreign IPOs: experts

By Kim Young-gyo
HONG KONG, July 5 (Yonhap) -- South Korea can attract more initial public offerings (IPOs) by foreign firms as many Western firms tap into the growing pool of liquidity in Asia, experts said Tuesday.
Asia's bourse operators are placing more importance on attracting foreign companies. Hong Kong has recently seen a number of big-name foreign firms, such as Italian luxury label Prada S.p.A., successfully sell their shares to investors here, while Shanghai is set to launch as early as this year a special bourse where foreign companies can be listed.
"In my opinion, there's no particular reason why South Korea can't do the same," Neil MacKinnon, a global macro strategist for Russia's top investment bank, VTB Capital Plc, told Yonhap News Agency.
MacKinnon was in Hong Kong on Tuesday to speak at the Russia Capital Raising and Investment Summit.
In the past few years, Russian companies have become increasingly active with flotations on international exchanges, attracting investors who consider buying into companies based in the commodity-rich country.
MacKinnon, a London-based strategist, said the South Korean government could take some initiatives in drawing more foreign IPOs.
"If the government actually takes the initiative and gets involved, it could ensure that the financial system grows in a sustainable way," he said.
During the last decade, Asian economies have contributed to about 60 percent of the global growth, but the market capitalization in the Asian equity markets accounts for only 10 percent of the total global markets, he added.
"All these countries that are modernizing, industrializing and seeing their gross domestic products going up, their financial systems have to catch up," he said.
A total of 18 foreign companies have listed on South Korea's main and secondary stock markets since 2007. Currently, 65 candidate firms from 10 countries are preparing to get listed in the South Korean exchange.
Barclays Capital said the growth of the Asian markets has been tremendous during the last 10 years, with their liquidity pools rising significantly.
"Today, with issuers looking to widen their investor base, Asia's pool of liquidity is too significant to ignore," said Robert Morrice, chairman and chief executive of Barclays in Asia Pacific.
"Bourses such as those in China, Hong Kong and Korea are now mature enough to source funding for the very largest companies."
According to Ernst & Young Global Ltd., a global consulting and accounting firm, South Korea's primary exchange, the Korea Exchange, raised US$7.75 billion, ranking as the 10th-largest exchange in the world in terms of the size of capital raised.
ygkim@yna.co.kr