Stock Market Soundness
The number of companies thrown off from the stock market has decreased by a sizable margin this year. While the stock market continued to show general poor performance with shrunken profits amid an economic recession, this is a clear sign indicating that the market has adjusted itself and became healthier by eliminating insolvent companies.
According to Korea Exchange on December 10, the number of companies delisted from the market due to M&A, impaired capital, and embezzlement amounts to 51. Among them, 18 companies came from the KOSPI and 33 from the KOSDAQ. This figure is an improvement from last year, when 77 companies were delisted, 24 from the KOSPI and 33 from the KOSDAQ.
The number of delisted companies has been on a steady decline since 2009. The number of delisted companies dramatically increased in 2009, a year after the global financial crash with the Lehman Brothers collapse in 2008.
At the time, 83 companies, representing a 220% increase from the year before, left the stock market. Since then, the number has declined every year to 94 in 2010 and 71 in 2011.