저작권자 © Korea IT Times 무단전재 및 재배포 금지
Stock Market Time to focus on substantial growth based on transparency and soundness On July 1, the KOSDAQ market (Korean Securities Dealers Automated Quotations) celebrated the 10th anniversary of its founding. The headquarters of the KOSDAQ market on June 26 announced it would implement a "roundabout listing management plan" as part of its efforts to minimize investors' risk and damage and revamp systems for sharing of more investment information. The KOSDAQ market was launched in 1996, with the introduction of a competition trading method. At that time, the aggregate market value was 8.6 trillion won and the number of listed companies came to just 343. As the government announced a measure to activate the KOSDAQ market in May 1999 and the global IT boom, including the bullish NASDAQ market of the United States, spread rapidly, the KOSDAQ index began to rise and posted the record high of 2,834.40 points on March 10, 2000. However, the KOSDAQ market experienced a long-term slump, affected by a plunge in stock prices in the wake of the collapse of the IT bubble and the lowering of confidence in the market following worsened profitability of IT enterprises. The KOSDAQ index recorded the lowest level of 324.71 points on Aug. 4, 2004. However, the steps to activate the venture industry announced at the end of 2004 provided the KOSDAQ market with a momentum to achieve the second take-off. In 2005, the first year of the launch of the Korea Exchange (KRX), the KOSDAQ index soared by 84.52 percent from 380.33 points to 701.79 points, the highest growth among major global stock markets, and entered a gradual recovery phase. The daily average trading volume and the daily average trading amount increased from 140,000 shares and 2.1 billion won, respectively, in 1996 to 30 million shares and 400 billion won in 1999. During the period from Jan. 2, 2006 to June 19, the daily average trading volume and the daily average trading amount came to 590 million shares and 2 trillion won, respectively, showing a change in the KOSDAQ market-listed companies. Since the market opening, it has so far supplied a total of 27 trillion won in direct funds to small and medium-sized venture companies, playing a role of a growth engine to activate the smaller venture companies. The total broke down into 9 trillion won through initial public offering (IPO) and 18 trillion won through rights offering with consideration. However, it suffered from a long-term slump owing to a plunge in stock prices in the wake of the collapse of the IT bubble and the lowering of confidence in the market following worsened profitability of IT enterprises. The KOSDAQ index fell to the record low of 324.71 points on Aug. 4, 2004, facing the bitter trial period. Based on the measure announced at the end of 2004 to activate the venture industry, the KOSDAQ market prepared a turning point for the second takeoff. As of June 19, 2006, the aggregate market value of the KOSDAQ market amounted to 61.7 trillion won, representing 7.2 times that of the market opening. The number of listed companies also posted a 2.7- fold increase to 927, enjoying brilliant growth. Efforts should be focused on protection of investors and an increase in value in order to enhance confidence in the KOSDAQ market. However, there are endless assertions that the efficiency of a system in terms of quality should be enhanced to protect investors from insincere public notices of listed companies and incomplete regulations on detour listing, along with such a quantitative increase. Although the KOSDAQ market achieved unprecedented growth in terms of quantity with the aggregate market value increasing 7.2 times and the number of listed companies rising 2.7 times over the past 10 years, it was somewhat insufficient in terms of soundness in fact. Also incomplete regulations on rapidly increasing detour listings (67 cases in 2005) have brought about problems on the market soundness and protection of investors. Due to the failure of a liquidation system in proper action, the cases that some insolvent listed companies avoided the liquidation through formal self-supporting steps occurred. In this way, the shortage of information on companies listed on the KOSDAQ market and the portion of transactions excessively concentrated on individual investors worked as a factor to expand variability of the KOSDAQ market. Related to this, Kwak Sung-sin, head of the KOSDAQ market headquarters, said, "We will make best efforts to promote confidence in the market and create a climate for sincere public notice through improvement of systems on management of detour listing and liquidation." In a related development, to minimize investors' damages in case small and financially weak non-listing companies advance into the market, the KOSDAQ market headquarters has implemented the "step on management of detour listing" since June 26. It reflects the headquarters' powerful will to realize a sound market where entries and exits work flexibly by liquidating insolvent companies from the market at an early date. To solve the problem on shortage of information on listed companies, it will expand the offering of the "XBRL financial information service" from the present 30 companies to all companies before 2007, helping institutions and foreign investors make easier access to the information. Along with this, it plans to map out regulations on obligatory public notice for bio and entertainment businesses, which have been emerged as a new business line of the KOSDAQ market, offering suitable investment information to investors. Besides, the KOSDAQ market headquarters plans to actively push for listing of foreign companies on the market and create new growth engine for the development of the domestic economy, by playing its role as a fund mobilization window for new technology and new growth-oriented companies.