KOSDAQ Aims to Grow into World's Top-tier Bourse for Tech Shares

The Korea Exchange (KRX) has marked the 22nd anniversary of the country's secondary KOSDAQ market by disclosing a vision to turn it into the world's top trading venue for tech shares.

At a press conference celebrating 22 years of KOSDAQ operation in Yeouido on July 2, Kil Jae-wook, chief of the KRX's KOSDAQ Market Division, said, “The KOSDAQ market is a success in several respects, such as market capitalization and trading volume."

He added, however, "It is also true that it has a long way to go. While seeking internal and substantive growth, we will at the same time try to expand further into the global market to make KOSDAQ the world's top-tier bourse for tech shares.”

In order to boost global investment demands for KOSDAQ shares and attract business, the KRX is pushing to have blue chips on China's Shenzhen Stock Exchange listed on the South Korean bourse. It will also consider the development of a marketability index that consist of blue chips listed on the KOSDAQ market and China’s Shenzhen Stock Exchange.

The KRX is also planning to add more underlying commodities in its bid to activate the KOSDAQ market. It will also increase the number of single-stock futures and options on the KOSDAQ market and list the futures of the KOSDAQ 150 Sector Index after the KRX300 Index consisting of both KOSPI and KOSDAQ stocks. The KRX is also expected to develop products related to the KRX Mid 200 Index consisting for small and mid-size blue-chip stocks listed on the KOSDAQ and KOSPI markets.

The tech-laden KOSDAQ market marked the 22th anniversary of its establishment on July 1. It was created in 1996, modeled after the NASDAQ market of the United States.

Since its opening, the total market capitalization has spiked over 40 times to 267.7 trillion won (US$239.45 billion) as of the end of last month. The daily trading volume, which came to around 2 billion won (US$1.79 million) in the first year, jumped to about 6.3 trillion won (US$5.63 billion) on average during the first six months of this year.

In particular, the daily average trading volume this year showed a steep growth compared to 3.7 trillion won (US$3.31 billion) last year as more institutional investors participated in due to the government’s KOSDAQ promotion policies.