South Korea's KOSDAQ market marked its 30th anniversary with the index trading near its original 1000 launch level from July 1, 1996, recently dropping to the 850 level. The prolonged stagnation stems from leading companies rapidly migrating to the KOSPI market after establishing their brands on KOSDAQ, while underperforming firms accumulate in the smaller exchange. KOSDAQ's market capitalization represents only 6% of South Korea's total stock market, contrasting sharply with the KOSPI index approaching the 10,000 level.
KOSDAQ Index Volatility Over 30-Year History
The KOSDAQ index launched at 1000 on July 1, 1996, and surged during the IT venture boom to reach an all-time high of 2925.5 in March 2000. Saereum Technology, a representative KOSDAQ stock featured as the real-world model for the fictional New Data Technology in the JTBC drama 'Reborn Rich,' saw its share price rise over 1000% within less than one year of listing.
The bubble collapse sent the index plummeting to the 600-700 level within one year. The decline continued through the mid-2000s until the 2008 global financial crisis drove the index down to 245.06. The index gradually recovered and exceeded the 1200 level in the first half of this year before falling back to the current 900 level.
Leading industries on KOSDAQ shifted continuously over three decades. Hyundai Heavy Industries held the #1 market cap position at the 1996 launch and currently trades on KOSPI as HD Hyundai Marine & Ocean Engineering. Naver (formerly NHN) dominated as the KOSDAQ flagship stock in the 2000s, followed by biotech firm Celltrion in the 2010s. Secondary battery companies led by EcoPro entered the top market cap rankings in the 2020s, with AI-related semiconductor materials, parts and equipment suppliers currently occupying upper-tier positions.
Leading Companies Migrate from KOSDAQ to KOSPI
Rapid transfers of established companies to KOSPI created a structural obstacle to KOSDAQ market expansion. Naver, Kakao, Celltrion and L&F transferred to KOSPI listings after building recognition on KOSDAQ. Alteogen, currently the #1 KOSDAQ stock by market capitalization, is weighing a potential KOSPI transfer.
Fewer Than Half of KOSDAQ Firms Record Profits in Q1
Accumulation of underperforming companies represents a more fundamental problem than the migration of successful firms. Approximately 450 KOSDAQ-listed companies recorded profits in the first quarter, representing fewer than half of all listed firms, according to financial data provider FnGuide.
FAQ
What was the KOSDAQ index level at launch and currently?
The KOSDAQ index launched at 1000 on July 1, 1996, reached an all-time high of 2925.5 in March 2000, dropped to 245.06 during the 2008 global financial crisis, and currently trades around the 900 level after briefly exceeding 1200 in the first half of this year.
Why do leading KOSDAQ companies transfer to KOSPI?
Leading companies including Naver, Kakao, Celltrion and L&F transferred to KOSPI listings after establishing their brands on KOSDAQ, with current #1 market cap holder Alteogen weighing a potential KOSPI transfer, contributing to KOSDAQ's stagnation as successful firms migrate while underperforming companies accumulate.
How many KOSDAQ companies were profitable in the first quarter?
Approximately 450 KOSDAQ-listed companies recorded profits in the first quarter, representing fewer than half of all listed firms on the exchange, according to financial data provider FnGuide.
