Tiếng ViệtThe viability of the Korea New Exchange (KONEX), a market exclusively for small and medium-sized enterprises (SMEs) and startups, is in question as it saw just one new listing this year.
According to the Korea Exchange (KRX), the only company that chose KONEX for listing in 2024 was Sevenbräu. The microbrewery entered the market in January, the month after it applied for listing.
This figure represents only a quarter of the companies that listed during the same period in 2023.
Additionally, so far this year, no companies have succeeded in transitioning from KONEX to the secondary Kosdaq.
KONEX was established in 2013 to help early-stage venture companies that possess technological capabilities but struggle to raise funds due to their short track records. Compared to the benchmark KOSPI and Kosdaq, it has lower entry requirements and relaxed disclosure obligations, offering companies opportunities to grow and later transition to the Kosdaq more easily than unlisted companies.
The number of new listings recorded 45 in 2013, 34 in 2014, 49 in 2015 and 50 in 2016, but it has been on a downward trend since 2021, with only seven listings that year. Fourteen companies made listings in both 2022 and 2023.
This contrasts with companies’ active listings on the KOSPI and Kosdaq.
The slump in KONEX listings is attributed to the eased barriers for entering the Kosdaq, such as the so-called “Tesla requirements.” Starting in January 2017, the system allows companies that fail to meet traditional listing requirements but have high growth potential, similar to Tesla in its early stages, to be listed on the Kosdaq.
Some market insiders also express skepticism about KONEX’s competitiveness in fund-raising compared to the Kosdaq. The daily average transaction amount in KONEX was 2.2 billion won ($1.6 million) this year, a 10 percent decrease from 2023.
Additionally, the government has cut the entire budget for this year for activating the KONEX market. Previously, the policy supported 50 percent of the necessary costs for companies listing on KONEX.
Nevertheless, the KRX has continued its efforts to revitalize the KONEX market by establishing a fund worth 100 billion won. However, the second fund, intended to be of the same amount this year, is facing difficulties in attracting limited partners.
“The threshold for listing on Kosdaq may be further lowered in the future, reducing the practical benefits of maintaining the Kosdaq and KONEX separately,” said Hwang Sei-woon, senior research fellow of the Korea Capital Market Institute. “It may be worth considering the integration and joint management of both markets.”
An official from the Korea Exchange also noted that there is ongoing deliberation on “whether to find ways to vitalize KONEX while maintaining its independence or to consider it within the overall structure of Kosdaq.”
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