[Reporter’s Notebook] What Matters More Than Pleas for Companies to Stay on KOSDAQ

"Can you stop companies from leaving? You have to make them feel, 'There really is a benefit to staying on KOSDAQ.'"

This comment was made by a venture capital (VC) industry insider in response to the recent appeals from the KOSDAQ Association and the venture business sector asking Alteogen, the leading KOSDAQ-listed company, to reconsider its planned transfer listing to KOSPI. The appeal argued that blue-chip companies like Alteogen need to remain on KOSDAQ and drive growth in order to create a virtuous cycle of capital inflows and the growth of innovative and venture companies. However, the VC industry insider's skeptical remark rings truer than the association's arguments.

His words resonate, because, unlike the KOSPI market—which enjoys steady capital inflows from foreign and institutional investors—the KOSDAQ market, with its high proportion of individual investors, is extremely volatile. It is also common for buying activity to be concentrated in so-called "thematic stocks." Switching to the KOSPI market to enjoy a premium, rather than suffering from a KOSDAQ discount, is a natural choice. The reality is well captured in the joking complaint of an executive at a KOSDAQ-listed company: "Our company's performance is consistently solid, but since we're not a thematic stock in a currently hot sector, our stock price is at rock bottom." It's hard to laugh it off.

Major companies such as Naver, Kakao, and Celltrion have already moved to the KOSPI market. The fact that the cause of "saving KOSDAQ" alone cannot reverse companies' rational decisions to seek stable financing is telling. Recently, Korea Exchange met with CEOs of promising unlisted companies to encourage KOSDAQ listings, but the lack of firm commitments reflects the same reality. There must be concrete advantages to staying, beyond industry appeals.

The government is also pursuing a "high birth, high death" policy to improve the market structure, bringing in quality companies to KOSDAQ while quickly delisting underperformers. However, this alone is not enough. In addition to supply management, there must be stable long-term investment support, such as from pension funds. On KOSDAQ, individual investors account for more than 70% of trading, whereas in the United States, institutional investors account for 50–60%. The VC industry has also highlighted the need for KOSDAQ activation funds, partially utilizing the National Growth Fund. In reality, a 150 billion won KOSDAQ league has been created within the National Growth Fund, but this is far short of the 30 trillion won KOSDAQ activation fund that the VC industry hopes for.

KOSPI, buoyed by semiconductor companies, is headed toward the 8,000 mark. In Yeouido's securities district, some are predicting a "KOSPI new normal" through structural transformation. In contrast, KOSDAQ is still far from its target of 3,000. Along with blue-chip companies, structural changes that bring in steady long-term investment capital are needed. Building on this, solid companies can attract long-term investment, which in turn attracts more blue-chip companies, creating a virtuous cycle. Rather than appealing for companies to stay, the priority should be to create a market where they want to stay.

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