As the government moves to revitalize the KOSDAQ market, investor funds are flowing into KOSDAQ. With large-cap stocks tied to the artificial intelligence (AI) bubble theory taking a breather, money is shifting to KOSDAQ theme stocks, and the strength of newly listed stocks is adding to the momentum, leading to an assessment that overall investor sentiment on KOSDAQ is improving.
According to the Korea Exchange (KRX) on the 20th, the KOSDAQ's average daily transaction value so far this month (Dec. 1–19) came to 11.3953 trillion won. It is the highest since Aug. 2023. KOSDAQ's average daily transaction value grew from 5.0334 trillion won in Aug. to 7.6913 trillion won in Sept., 8.8847 trillion won in Oct., and 9.4794 trillion won in Nov. In contrast, KOSPI's transaction value hit a peak of 18.0838 trillion won in Oct. and fell to the 14 trillion won range this month.
Individual investors are also active in KOSDAQ margin transactions. According to the Korea Financial Investment Association, as of the 17th, the KOSDAQ margin loan balance was 10.1397 trillion won, a record high this year.
A margin loan is a method in which an investor pays interest to a securities firm to borrow funds to buy stocks, and the balance tends to increase as expectations for a stock price rise grow. Even for one-day use, an annualized rate above 5% applies, making it a representative "debt investing" indicator for individual investors.
Behind the inflow of individual investor funds into the KOSDAQ market is optimism over the government's "KOSDAQ rescue" policy. On the 19th, the government announced measures to boost KOSDAQ and said it would improve performance evaluation metrics for pension fund investments and expand tax benefits for business development company (BDC) vehicles to increase institutional inflows.
Kim Jong-yeong, an analyst at NH Investment & Securities, said, "The core driver of KOSDAQ strength is policy momentum," adding, "As large-scale policy funds formed through the Mother Fund and the Public Growth Fund flow through venture and advanced industries into KOSDAQ growth sectors, they will lift both earnings visibility and valuations." He also projected that next year the KOSDAQ index could rise to as high as 1,100 points.
With KOSPI large-cap stocks faltering amid the AI bubble theory, investors have chosen the KOSDAQ market as an alternative. In particular, as expectations spread that the U.S. Donald Trump administration will foster robots as the next-generation strategic industry, related stocks showed notable gains. In addition, as obesity treatments emerge as leading stocks next year, investor sentiment improved for KOSDAQ, which has a high weighting in bio stocks.
On top of that, newly listed KOSDAQ stocks fueled sentiment by extending a "double" rally. Through the 19th of this month, excluding SPACs, a total of eight stocks debuted on the KOSDAQ market, and seven of them achieved a "double," surpassing twice the offer price intraday on their first day. Aimed Bio, which listed on the 4th, and Rznomics, which listed on the 18th, each rose 300% from the offer price on their listing day and then hit the upper limit the next day, extending the IPO rally.
Flows also concentrated in the newcomers. From Dec. 1 to 19, newly listed names dominated the list of the most net-bought stocks by individual investors on the KOSDAQ market. Aimed Bio, which listed on the 4th, ranked No. 2 with net purchases of 189.4 billion won, and G2GBIO ranked No. 3 with 119 billion won. They were followed by TeraView (84.2 billion won) and FESCARO (82.1 billion won), which ranked No. 7 and No. 8, respectively.
Analysts also say news of a transfer listing by Alteogen, KOSDAQ's bellwether, had an impact. Kang Jin-hyeok, an analyst at Shinhan Investment & Securities, said, "If the transfer listing of Alteogen to KOSPI leads to the bellwether's exit from the KOSDAQ150 index, passive funds tracking it could flow into other stocks," adding, "Attention is needed on robots and pharmaceutical-bio sectors concentrated at the top of the market cap rankings."