KOSDAQ 2nd-best-performing global index over support measures

Seoul, Feb 16 (IANS) South Korea’s smaller KOSDAQ was the second-best-performing stock index in the world over the past month, only after the country’s benchmark KOSPI, amid government measures to boost the secondary market, data showed on Monday.

The KOSDAQ rose 16.45 per cent from 949.81 points on January 13 to 1,106.08 points on Friday, according to the data from Yonhap Infomax, the financial arm of Yonhap News Agency.

Trailing behind the KOSDAQ were SET and ISE-100 — benchmark indexes of Thailand and Turkey — which rose by 16.05 per cent and 15.71 per cent, respectively, during the one-month period.

The KOSDAQ sharply outperformed U.S. markets. The tech-heavy Nasdaq fell 4.79 per cent and the S&P 500 inched down 2.07 per cent over the one-month period, according to the data.

The best-performing stock index in the world was South Korea’s benchmark KOSPI (Korea Composite Stock Price Index), which jumped 19.07 per cent during the cited period.

“The KOSDAQ index is continuing to rise, mostly driven by investments in exchange-traded funds (ETF) holding companies in the secondary market, amid anticipation that the government’s policy focus will move to the KOSDAQ,” Lee Sung-hoon, an analyst from Kiwoom Securities, said.

The government has announced a slew of measures to boost the venture-heavy KOSDAQ under its initiative to transition into productive finance.

It has vowed to expand public investments in the secondary market while tightening delisting rules to remove troubled companies, which have long been considered a drag on the junior market’s growth.

An even bolder move is under way at the National Assembly.

Earlier this month, a ruling Democratic Party lawmaker proposed a bill to spin off all functions related to the KOSDAQ market at the Korea Exchange, the country’s main bourse operator, into an independent subsidiary.

The bill aims to grow the secondary market into the likes of Nasdaq in the United States.

“The key point of the government’s measures is to establish a structural base for institutional investors to participate in the KOSDAQ market,” Jeong Eui-hyun, an analyst from Mirae Asset Securities, said.

“We think the measures could both normalise liquidity and valuation of the secondary market,” he added.

—IANS

na/