Booming KOSDAQ
“The KOSDAQ market, which has been isolated from the bullish global stock markets, shows a rising trend. This is because three factors that cause the isolation, including poor performance, lack of balance in supply and demand and lack of investors' confidence, have been addressed,” Jung Da-ee, an analyst at Meritz Securities Co, said on November 9.
In fact, the KOSDAQ closed at 709.11 on the 8th, reaching a record high for the year. It seems that the KOSDAQ index has a better relative strength to the KOSPI after October. The KOSDAQ rose 6.3 percent in October and 2.1 percent in November, surpassing the KOSDPI by 0.9 percent point and 1.0 percent point over the same period. This is due to the fact that companies’ improvement in performance spread to the KOSDAQ market and there are a momentum from the new government policy and an optimistic view on the market. Jung said, “These three indicators are also the driving force that helps KOSDAQ-listed companies have additional increases in the future.”
According to Meritz Securities, the sales and operating profits of 151 KOSDAQ-listed firms that announced their Q3 results as of the 8th came to 97.8 trillion won (US$87.48 billion) and 11.5 trillion won (US$10.28 billion), respectively, up 20.9 percent and 51.9 percent from the same period a year ago. Out of the 151, 43.5 percent of 49 companies that have consensus and account for 23 percent of the KOSDAQ’s total market cap exceeded market expectations and their sales and operating profits also surpassed market expectations by 4.8 percent and 9.1 percent, respectively.
After the announcement of results in the third quarter, the operating margin forecasts of KOSDAQ 150 also show a relatively improvement compared to KOSPI 200. In particular, the relative profit rates of companies in the information technology and consumer discretionary sectors that have a high level of dependence on conglomerates in terms of sales are improving.
During the announcement of “Innovative venture ecosystem creation plan” on the 2nd, the government stressed the role of the KOSDAQ market in order to promote innovative start-ups. It is also planning to additionally announce the “KOSDAQ market-focused capital innovation plan” next month as part of its efforts to improve the systems to restore and activate the functions of the divestment market including the KOSDAQ. In addition, the government will develop the benchmark index, improve the National Pension Service’s fund operation evaluation scheme and boost the share of its investment in the KOSDAQ market to 10 percent in a bid for the service to expand the share of investment in the KOSDAQ market.