The KOSDAQ market, marking its 30th anniversary, has begun a full-scale overhaul through tighter expulsion of troubled companies and the introduction of a system to identify blue-chip firms (the KOSDAQ segment). While the KOSPI has surged this year, KOSDAQ has remained stagnant, raising expectations that revitalization policies will resolve its undervaluation.
According to the Korea Exchange (KRX), delisting requirements took effect Monday that will expel stocks whose market capitalization (20 billion won) and share price (1,000 won) fall below thresholds for a certain period. There are 224 penny stocks in total, with 150 (67.0%) on KOSDAQ alone. Seventy-two stocks fail to meet the market cap standard, and the exchange expects the number of companies designated for delisting this year to rise to 88. The aim is to create a "high birth, high death" structure that weeds out troubled and marginal firms while listing innovative companies in fields such as artificial intelligence (AI) and defense in a timely manner. The exchange plans to designate the period through June next year as an intensive management period to swiftly expel troubled companies.
A "promotion-relegation system" that separately classifies blue-chip firms is also gaining pace. Through the tentatively named "KOSDAQ Select," the exchange plans to select leading companies with growth potential and stability and pursue an index business based on this. It will draw up detailed plans after public hearings in July and August. The basic framework is to introduce an organic promotion-relegation system between segments to maintain corporate dynamism.
In addition, a list of "low-PBR (price-to-book ratio)" companies, so-called "Naming and Shaming," will be disclosed as early as October. Listed companies whose PBR ranks in the bottom 20% of their industry across two consecutive regular reports, excluding quarterly reports, will be disclosed, but companies that have disclosed corporate value enhancement plans will be exempted from listing for a certain period. As of Monday, the average PBR of the bottom 20% of KOSDAQ-listed companies is 0.33 times.
At the "KOSDAQ Market 30th Anniversary Ceremony" held at the Conrad Hotel in Yeouido, Seoul, KRX Chairman Jeong Eun-bo stressed, "Despite an unprecedented boom in the capital market, the structure of joint growth between small and medium-sized enterprises and large corporations, and between KOSPI and KOSDAQ, seems not to have taken root," adding, "We will reform the KOSDAQ market structure and re-establish a transparent and fair market order."
KOSDAQ, which launched in 1996 with a market capitalization of 7 trillion won, surpassed 600 trillion won for the first time in January this year. The number of listed companies increased from 341 in the early days to 1,821 as of Monday. Since 2018, more than 100 companies have been newly listed each year for eight consecutive years. Last year, KOSDAQ-listed companies posted revenue of 297 trillion won and operating profit of 11.7 trillion won, up 8.8% and 21.9% respectively from the previous year. Since the market opened, funds raised through initial public offerings (IPOs) and rights offerings alone reached 89 trillion won, demonstrating results, but the accumulation of marginal firms, concerns over unfair trading, and a structure mixing blue-chip and troubled companies have been cited as factors discounting the market.
Earlier, in March, customized technology special listings for the AI, energy, and space industries and the introduction of business development companies (BDCs) took effect, and in May, a 150 trillion won National Growth Fund was launched. Financial Services Commission Chairman Lee Eok-won said, "We will make KOSDAQ the destination for growth stock investment," announcing plans to expand small public offering limits, impose venture capital supply obligations on large investment banks (IBs), and create secondary funds of more than 2 trillion won. The market believes that not only such institutional reforms but also earnings support from companies will be needed for KOSDAQ to trend upward and win investor trust.
The KOSDAQ index closed Monday at 929.35, up 13.17 points (1.44%) from the previous trading day. The index gain was led by semiconductor materials, parts, and equipment companies. Jusung Engineering, the fourth-largest by market capitalization, closed at 242,000 won, up 20.40%, while materials, parts, and equipment firms within the top 20 by market cap, including PSK (7.85%) and Simmtech (5.78%), also posted steep gains. The rally is interpreted as being influenced by large-scale policy funds flowing into semiconductor companies after the government unveiled a blueprint to build a large-scale semiconductor production facility (fab) in the southwestern region.
Meanwhile, "KOSDAQ CONNECT 2026," an investor relations (IR) event co-hosted by the exchange and the KOSDAQ Association, also opened Monday. The event runs through Wednesday, with KOSDAQ companies meeting investors through themed joint IR sessions, followed by expert lectures and seminars.
