Dealers work at the dealing room of Hana Bank in Jung-gu, Seoul, on the 1st. Yonhap News
At least 88 companies are expected to be delisted from the KOSDAQ this year, more than double the 38 recorded the previous year. The Korea Exchange (KRX) unveiled a market reform plan aimed at restoring market confidence by removing troubled companies while distinguishing sound firms from risky ones.
The KRX announced the KOSDAQ market roadmap and new system initiatives, which include these measures, at the “KOSDAQ Market 30th Anniversary Ceremony” held at the Conrad Hotel in Seoul’s Yeouido on Monday.
The exchange will first significantly strengthen its system for removing troubled companies. Starting Monday, it will introduce delisting requirements for penny stocks priced below 1,000 won and will gradually raise exit thresholds, including market capitalization. While simplifying substantive review procedures, it will increase the intensity of reviews and tighten the cumulative penalty point standards for insincere disclosures.
As a result, the KRX projected that the number of delisted companies will rise from eight in 2023 and 38 last year to around 88 this year.
“As the removal of troubled companies was delayed, cases of some firms being exploited as tools for unfair trading recurred, and this led to the perception that KOSDAQ is a market difficult to trust and invest in,” said Choi Ji-woo, executive director of the KOSDAQ Market Division at the Korea Exchange. “The goal is not delisting itself, but restoring the trust of the entire market and enhancing the accountability of listed companies and market soundness.”
The exchange is also pursuing “KOSDAQ Select” (tentative name), which would separately classify sound companies. It plans to select representative firms with growth potential and stability to create a separate segment, and to develop an index based on it.
In addition, the KRX decided to advance listing reviews for cutting-edge industries such as artificial intelligence (AI), bio, semiconductors, and defense, and to sequentially establish review standards for new sectors such as advanced robotics and cybersecurity. It will also review the evaluation model for the technology special listing system and improve it so that the technological capabilities of new-industry firms can be assessed more accurately.
“The structure in which troubled and sound companies are mixed within a single market, making it difficult to separate the good from the bad, also served as a factor in the undervaluation of the entire market,” Choi said. “We will pursue the strengthening of the delisting system and the introduction of segments as core tasks.”
Meanwhile, the KOSDAQ index closed at 929.35 on Monday, up 13.17 points, or 1.44%, from the previous trading day. It showed weakness early in the session but maintained an upward trend after successfully turning positive.
Foreign investors net bought 247 billion won worth of shares on the KOSDAQ market. In contrast, institutions and individuals net sold 124 billion won and 110 billion won worth, respectively.
On the KOSDAQ market, Jusung Engineering rose sharply by 20.4%, while PSK (7.85%), Simmtech (5.78%), and ABL Bio (2.01%) also advanced. In contrast, EcoPro (-12.76%), EcoPro BM (-6.88%), HLB (-3.46%), Leeno Industrial (-2.74%), and Samchundang Pharm (-1.11%) declined.