KOSDAQ Market Cap Reaches 300 Trillion Won

[Asia Economy Reporter Koh Hyung-kwang] The market capitalization of the KOSDAQ market has reclaimed the 300 trillion won level for the first time in 2 years and 5 months. Although it shrank to the 150 trillion won level last March due to the impact of the novel coronavirus infection (COVID-19), it showed rapid resilience based on abundant liquidity and nearly doubled in four months.

According to the Korea Exchange on the 31st, the total market capitalization of KOSDAQ as of the previous day's closing price was 301.6372 trillion won. The last time KOSDAQ market capitalization recovered to the 300 trillion won level was on February 8, 2018 (307.7858 trillion won), about 2 years and 5 months ago. Compared to the lowest market capitalization this year on March 19 (157.0265 trillion won), it increased by 92.1% (144.6100 trillion won), nearly doubling in four months.

KOSDAQ market capitalization surpassed 100 trillion won in 2007, 200 trillion won in 2015 after 8 years, and 300 trillion won in 2018, 3 years later. However, growth momentum gradually weakened, and it started to lose strength, with the 200 trillion won level collapsing in August last year. This year, due to the impact of COVID-19, the KOSDAQ index fell to 419 in mid-March, causing a significant drop in market capitalization, but it quickly recovered afterward. Recently, it has not only recovered the losses caused by the COVID-19 crisis but has been hitting new yearly highs day after day. On the 23rd, it surpassed 800 points based on the closing price for the first time in 1 year and 9 months since October 2018.

The remarkable rebound of the KOSDAQ index is attributed to abundant liquidity in the market flowing into KOSDAQ’s bio and untact (non-face-to-face) related stocks, creating a relative strength. In particular, the surge of growth stocks such as pharmaceuticals & bio, information technology (IT), gaming, and media had a significant impact. Since the beginning of the year, the pharmaceutical sector in the KOSDAQ market rose by 48.7%, and software (29.2%) and IT software & services (27.9%) also recorded high growth rates. Choi Yoo-jun, a researcher at Shinhan Financial Investment, explained, "As liquidity supply continues globally, the relative performance of domestic and international growth stocks is improving," adding, "In the U.S., the Nasdaq stocks are performing better than the Dow Jones index, which is the same context."

The securities industry predicts that interest in KOSDAQ growth stocks will inevitably increase, given that the COVID-19 pandemic has created an environment where future industries can grow more in a low-growth, low-interest-rate era. Kang Bong-joo, a researcher at Meritz Securities, advised, "KOSDAQ, which is mainly composed of growth stocks, tends to react more sensitively to liquidity," adding, "However, while this trend is expected to continue for the time being, attention should be paid to risk factors such as overvaluation controversies."

On this day as well, KOSDAQ showed a slight upward trend. As of 10:30 a.m., KOSDAQ recorded 817.85, up 0.45% (3.66 points) compared to the previous day.

This content was produced with the assistance of AI translation services.