Incheon Rice Exchange
The first futures market began in 1710 at the Dojima Rice Market in Osaka, with rice as the underlying asset. Prices at the Incheon Rice Exchange were determined by prices in this Osaka market.
According to records, 90% of the exchange's customers were Koreans, and over about 15 years they poured money worth hundreds of millions of won into the rice futures market. Internally, the exchange also suffered from irregular operations and corruption (汚職), and was dissolved on two occasions, in 1898 and 1919, with executives arrested in droves.
After liberation, Korea's rice prices were set using a mix of government control and market principles. The need for a grain exchange emerged in the 1960s, but the nightmare of the rice exchange repeatedly held it back.
Half a century later, in 1996, Korea's futures market reopened. The KOSPI 200 futures, which trade the KOSPI 200 stock index, were listed. The new futures market once again ignited dreams of striking it rich through the success stories of new masters such as 'Apgujeong loach (Yun Gang-ro)' and 'Mokpo three-legged octopus (Jang Gi-cheol).' As investors who took on debt to jump into the futures market flooded in, Korea's futures and options trading volume astonishingly rose to No. 1 in the world in 2002 and 2003.
Kang Ik-ha, a disciple of Baekbeom Kim Gu, made a fortune through rice futures trading and founded Daehan Life Insurance (Hanwha Life), the first private insurer right after liberation. Jo Jun-ho, the eldest son of Jo Jung-jeong, a tycoon of the late Korean Empire, established Donga Securities in 1934 and expanded his business by quickly relaying Osaka stock market prices; after liberation, he built the Savoy Hotel in Chungmuro, Seoul. Kim Gwi-hyeon predicted a drastic change in Japan's situation in 1936 and made a killing. Having originally squandered his fortune at the Gunsan rice exchange, he earned 200,000 won within a few months and later founded Myeongchi Securities.
Topics: Ban Bok-chang,Futures,South Korea
Category: Wiki/Economy