K-OTC Without a Leading Stock, Market Cap Evaporates by 20 Trillion Won in Two Months

[Asia Economy Reporter Minji Lee] K-OTC, which had risen alongside the stock market boom, has seen investor interest sharply decline as the index stagnates and enthusiasm for leading stocks fades.

According to the Financial Investment Association's electronic disclosure system as of the previous day, the market capitalization of companies registered on K-OTC (143 companies) stands at 21.0361 trillion KRW. The market capitalization of the K-OTC market soared to 46.3751 trillion KRW in February this year but has lost 20 trillion KRW in just over two months.

K-OTC is an institutional unlisted stock market operated by the Financial Investment Association. While unlisted stocks attracted attention alongside the rally in listed stocks, significantly increasing company valuations, concerns over corporate earnings due to external variables and the accelerated interest rate hike trend have rapidly cooled enthusiasm for unlisted stocks.

The average daily trading volume in April was recorded at 3.31164 billion KRW, which is lower than March 2020's 4.24403 billion KRW, when risk appetite for risky assets sharply declined due to COVID-19. Compared to the average daily trading volume of 9.99523 billion KRW recorded in December 2021, it has dropped to about one-third.

The sharp decline in the stock price of Canaria Bio (formerly Duol Mulsan), which had maintained the top market capitalization position since October after its listing in September last year, also accelerated capital outflow from the K-OTC market. Canaria Bio's market capitalization grew from 6.9841 trillion KRW (23.24% share) in October last year to nearly 13.7417 trillion KRW (39.92% share) in February this year, more than doubling.

However, with the stock price plunging, the current market capitalization is around 349.2 billion KRW. The stock price, which soared to 300,000 KRW in February, is now trading at 3,380 KRW. The stock price surged as interest in ‘Oregobomab,’ an ovarian cancer immunotherapy, and dissatisfaction with short-selling forces drew attention as the ‘Korean version of GameStop,’ but investor sell-offs continued after Canaria Bio acquired Hyundai Feed, a KOSDAQ-listed company. Most investors have moved to Hyundai Feed, whose stock price has jumped significantly from 16,000 KRW in March to 135,000 KRW currently.

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