For a long time, KOSPI (Korean Composite Stock Price Index) and KOSDAQ (Korea Securities Dealer Automated Quotation) have been the only choice for stock investors as they had most of the listed firms in the Korean stock market. The problem was that scrupulous requirements to be listed in these markets had been an eclipsing prospective for small-in-size companies to raise capital and grow further. Thus, there had been a multitude of criticizing voices demanding to open another stock market with a lower entry barrier for small firms.
Fortunately, this demand happened to be timely in a manner that President Park’s new blue print, so called as ‘Creative Economy’, also seeks to support small-to-mid-size firms with avant-garde technologies and great know-how. The combination of Park’s new policy and the existing demand for a new market for small businesses has led to the birth of KONEX in July, 2013. The following mark is the differences in listing requirements between KOSDAQ and KONEX.
As of today, it has already passed 6 months since the birth of KONEX in July of 2013. Its performance has been excellent so far as the number of listed firms doubled in a half year. Also, there have been cases in which capital was raised through paid-in capital increase, which demonstrates the prospect of KONEX as a desirable market for small businesses. In particular, as of December 26th, the number of firms increased from 21 to 45; moreover, a total of 7 firms have raised capital of 15.58 billion won through paid-in capital increase.
Thanks to the remarkable growth and development of KONEX, the government is planning to expand the spectrum of designated advisors through which it actively seeks to discover more of promising firms in order to procure additional listing of prospective firms. Furthermore, the authorities expect to attract more venture capital and public offering funds to stimulate the investments in KONEX listing firms through KONEX market supporting system that is in its last stage of amendments. And lastly, firms that are expected to grow successfully in the future will be provided chances of moving up to KOSDAQ market.