[Reporter’s Notebook] "KOSDAQ Is Doing Well, So Why Do This?"

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] On the 17th, a seminar was held at the Korea Exchange Yeouido building to introduce the ‘KOSDAQ Segment System.’ Since the event was organized to hear opinions from experts across various fields, it was expected that diverse criticisms would emerge. However, while the necessity of the segment system was emphasized, no one volunteered to be the ‘Devil’s Advocate.’

Although the seminar proceeded with smiles, the Korea Exchange’s concerns were clearly revealed. Although KOSDAQ surpassed the 1,000-point mark this year, investors still perceive the KOSDAQ market as a secondary market to KOSPI or merely a market suitable for short-term trading. It is now time to consider qualitative growth to achieve a status similar to NASDAQ.

However, if the segment system is created as it currently stands, it is likely to become a system that is neither here nor there. Although specific criteria have not yet been announced, it was stated that the segment system would be introduced in a way that minimizes the alienation of companies excluded from the segments. This implicitly reveals concerns that funds may concentrate on stocks included in the segments.

It is highly likely that the top market capitalization stocks of KOSDAQ will be included in the segments as they are. The top market capitalization stocks on KOSDAQ will try to meet the quantitative criteria set by the Korea Exchange to be included in the segments, and they have the capacity to do so.

That said, opportunities to raise larger funds should not be denied to small companies with innovative potential. Tesla is a good example. Initially, it was a company that showed no results, but after listing on NASDAQ, it steadily attracted funds and invested in its business. Currently, Tesla has a presence strong enough to shake the global stock markets. KOSDAQ is likely dreaming of such success. However, if the alienation of companies excluded from the segments begins to be a concern, can policies aligned with the purpose of the segment system be introduced without hesitation? If top market capitalization stocks are excluded and unheard-of companies are included, investors will undoubtedly raise an outcry.

The answer is known to all. It is not about artificial line-drawing but about waiting for companies to deliver results. Despite bubble controversies, during the IT boom, the IT sector led KOSDAQ, and when COVID-19 spread, the bio sector took the lead. None of these were flows proactively created by a government agency. They were possible because companies listed on KOSDAQ achieved results in line with the times.

During the seminar, a participant asked through the metaverse, "KOSDAQ is doing well, so why are you doing this?" All seminar participants laughed, but there seems to be a point behind the words. Perhaps it is an opinion that it is better to monitor the market more thoroughly than to introduce a segment system that is neither fish nor fowl.

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