KOSDAQ market capitalization hits 500 trillion, a look at the market's present and future

kOSDAQ enters the 500 trillion era

the market capitalization of KOSDAQ has finally surpassed 500 trillion won for the first time in history. This milestone is largely attributed to the expectation that the government will announce a policy to revitalize KOSDAQ within the year. investors are increasingly interested in the government's policies, and funds are steadily flowing into the market.

this has led to a lot of discussion about the future of KOSDAQ. let's take a look at whether the bull run can be sustained and what challenges the market needs to address.

a review of the current state of the market

trading structure centered on retail investors

currently, trading on KOSDAQ is dominated by retail investors. institutional and foreign investors are somewhat cautious about participating in KOSDAQ, which is characterized by a high stock turnover rate and a large proportion of short-term trading compared to the KOSPI, resulting in relatively high volatility.

the phenomenon of pre-KOSPI listings

listed companies also tend not to consider KOSDAQ as a place to stay for long. once a company reaches a certain size, it often chooses to list on the KOSPI, and even the bio company with the largest market capitalization on the KOSPI is planning to move to the KOSDAQ.

because of this trend, experts consider restoring investor confidence in KOSDAQ to be the most urgent task. this is because the market needs to be stable in order to attract investment, which in turn drives venture growth.

reasons for the decline in investor confidence

unfair trade issues on KOSDAQ

the biggest cause of the decline in trust is unfair trade on KOSDAQ. kOSDAQ has a structural characteristic that makes it easy for outside forces to intervene. cases that undermine market order are often found, such as capital-free mergers and acquisitions using companies with low trading volumes or weak financial structures, and excessive emphasis on themes.

the problem of zombie companies and the need for stronger regulation

while the KOSDAQ is active in listing new companies, it is inactive in cleaning up companies with weakened business bases. This has led to a growing problem of zombie companies with little business activity. As this situation accumulates, there are growing calls for strengthening KOSDAQ regulations.

how do overseas stock markets work?

differences compared to Nasdaq

the Nasdaq is characterized by easy entry and bold exits. around 200 new tech companies are listed every year, but twice as many - around 400 - are exited. This process has allowed global companies like Nvidia, Apple, and Google to grow. in comparing Nasdaq, it's also worth noting that unlike Korea, where the KOSPI and KOSDAQ are part of the same exchange, the New York Stock Exchange and Nasdaq are separate entities.

the Japanese stock market league system

japan operates a league system for its stock exchanges called Prime, Standard, and Growth. global conglomerates are placed in Prime, mid-sized domestic companies in Standard, and technology growth companies in Growth. the league system is based on a promotion system, where companies are promoted if they meet the listing requirements and demoted if they do not.

frequently asked questions

Q. why is the KOSDAQ market capitalization of $500 trillion important?

A. This is the first time in history that the market has reached this level, reflecting the expectations of the government's revitalization policies and the interest of investors. it is a symbolic milestone that shows the growth potential of the KOSDAQ market.

Q. what is the biggest difference between KOSDAQ and Nasdaq?

A. Nasdaq has a high number of entrants and exits, which naturally weeds out good companies, while KOSDAQ has fewer exits compared to new listings, so the market purification function is relatively weak.

Q. when will the government's policy to revitalize KOSDAQ be announced?

A. It is expected to be announced sometime this year and will focus on restoring investor confidence and supporting the growth of venture companies.

Q. what should I be aware of when investing in KOSDAQ?

A. It is important to understand the volatile and short-term nature of the market and carefully check the financial structure and business foundation of companies.

closing thoughts

the KOSDAQ market capitalization of 500 trillion won is a significant achievement, but challenges remain in restoring investor confidence and ensuring market health. we hope you will continue to follow the government's policy direction and market changes.

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