NH Investment & Securities said on the 22nd that although the KOSDAQ index is rising on policy expectations after the government released its plan to "boost trust and innovation in the KOSDAQ market," the return gap with the KOSPI index remains large, suggesting further upside potential will expand.
On the 19th, the Financial Services Commission said during a presidential policy briefing that it would focus next year on promoting measures to boost trust and innovation in the KOSDAQ market.
To fundamentally improve the structure of the KOSDAQ market, the government released policies centered on: ▲ strengthening the independence and autonomy of the KOSDAQ headquarters ▲ redesigning listing review and delisting frameworks ▲ conditions for institutional investor participation ▲ stronger investor protection.
Researcher Na Jeong-hwan at NH Investment & Securities explained that the core of the policy is "restructuring the listing and delisting framework and expanding institutional investor participation."
First, to improve the KOSDAQ market qualitatively, the government plans to completely redesign the listing and delisting structure. It will fully introduce tailored technology special listings for core technology fields of national importance, and within the year will first prepare tailored technology screening standards focused on three key industries: artificial intelligence (AI), energy (ESS), and the space industry.
Meanwhile, to swiftly review and remove insolvent corporations, the government will establish and strengthen a delisting review organization, and expand the dedicated KOSDAQ delisting department from three teams to four, pursuing both the selective inflow of growth corporations and qualitative cleansing within the market.
The government will also expand institutional investor participation. To encourage national pension funds to increase investment in the KOSDAQ market, it is reviewing improvements to fund management evaluation criteria and is considering reflecting the KOSDAQ index at a certain ratio when calculating benchmark returns.
In addition, it will expand the tax benefit cap for KOSDAQ venture funds from the current 30 million won, and is actively reviewing the introduction of new tax benefits for Business Development Companies (BDC), which are slated to take effect in March next year. It also plans to extend for three years the tax and IPO allocation priority benefits for KOSDAQ venture funds and BDCs, and to raise the IPO priority allocation ratio from the current 25% to 30%.
Other measures include: ▲ expanding and reallocating personnel at the KOSDAQ headquarters ▲ to expand venture capital, encouraging comprehensive financial investment companies with issuance bill and Investment Management Account (IMA) licenses to increase KOSDAQ research reports ▲ expanding disclosures of plans to enhance corporate value by specially listed corporations ▲ reflecting in listing rules the review criteria for dual listings. These policies are evaluated as supplementary measures that support restoring trust in the KOSDAQ market.
Na said, "While the KOSDAQ index is on an upward trend on expectations for KOSDAQ activation policies, the return gap with the KOSPI index is still at 31.6 percentage points," adding, "As the government's restructuring of listing and exit frameworks and policies to attract institutional investors get into full swing, the KOSDAQ index's additional upside potential is expected to expand."
Na also analyzed that as capital expenditure (CAPEX) by large semiconductor corporations expands, performance improvements in the KOSDAQ IT sector will likely support the index's rise.
Na explained, "KOSDAQ venture investment is likely to concentrate funds on new growth industries such as AI, ESS, and space, where the likelihood of special listings has increased," and added, "In addition, stronger delistings of insolvent corporations, amendments to the Commercial Act, and the passage of bills related to tender offers are expected to help resolve the KOSDAQ discount."