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The KOSDAQ index has struggled to reclaim the 1,000-point milestone despite last month's historic rebound. Although the tech-heavy index surged more than 15% in August, it has failed to sustain its upward momentum, slipping back into a downtrend earlier this month. Shrinking transaction volume and fragile supply-and-demand dynamics have been cited as key factors undermining the index's upward momentum, which had once crossed the 1,200 level earlier this year. Amid the government's recent decision to delay the further tightening of delisting criteria by six months, market observers emphasize the need for systemic improvements across the board, including creating conditions that encourage blue-chip firms to remain on the KOSDAQ and boosting inflows of long-term institutional capital.

According to the Korea Exchange on the 6th, the KOSDAQ closed at 813.50 on the 4th, up 23.29 points (2.95%) from the previous trading session. Starting at 957.50 on the first trading day of the year, the index broke through the 1,000-point mark on January 26 to reach 1,064.41, and climbed as high as 1,213.74 on May 4. However, it has not returned to the 1,000-point level since recording 1,000.93 on June 18.

Last month, the KOSDAQ rose 15.91%, posting its highest August gain since the market's launch in 1996, but fell back by 2.49% between the 1st and the 4th of this month. From January 2 to the 4th of this month, the KOSDAQ dropped 12.10%, whereas the benchmark Kospi gained 58.68%, widening the return gap alone to 70.78 percentage points.

Supply and demand dynamics have also failed to adequately support the rebound. The KOSDAQ's average daily trading value, which stood at 14.9122 trillion won in January, plunged by roughly 60% to 5.9868 trillion won in August. Even as the index gained more than 15% in a single month, market turnover failed to recover to levels seen at the beginning of the year.

Yoon Jae-hong, a researcher at Mirae Asset Securities, characterized the KOSDAQ market as suffering from "deformed capital raising and fragile supply and demand." He explained that the market continues to exhibit a high-birth, low-death structure, where initial public offerings significantly outpace delistings. In fact, while the KOSDAQ's market capitalization expanded by 1,362% after 2005, the index's growth rate reached only 110.9%.

In light of recent conditions in the KOSDAQ market, the government has adjusted the pace of tightening delisting rules. On the 4th, the government and the Korea Exchange delayed the planned increase in the market cap delisting threshold—raising it from 20 billion won to 30 billion won, originally slated for next January—by six months to next July. Authorities also decided to allow companies meeting specific financial criteria to transfer to the Konex market without entering the liquidation phase. The decision reflects the view that the market needs time to recover given the recent downturn in KOSDAQ sentiment, although the broader policy direction of swiftly delisting troubled companies remains intact.

Calls are growing across the market for comprehensive improvements covering corporate listings, growth, and long-term capital inflows to revitalize the KOSDAQ. At a recent KOSDAQ revitalization forum hosted by the Korea Exchange, participants voiced opinions that listing burdens on blue-chip companies should be eased and that delisting criteria should be refined to effectively gauge actual financial insolvency. A proposal was also made to create a 30-trillion-won KOSDAQ revitalization fund through public-private cooperation.

Kim Tae-woo, CEO of Hana Asset Management, remarked, "We need to create an environment where high-quality companies choose to stay on the KOSDAQ, while expanding long-term institutional capital inflows by linking KOSDAQ venture funds with the cornerstone investor system."

                                                                                                          Park Joo-yeon