Korean Stocks Face Delisting Risk as Stricter Rules Take Hold

South Korean stock markets are facing increased pressure as stricter delisting criteria, implemented about a month ago, begin to impact listed companies. The new measures, aligned with the government's 'stock market value-up' policy, are intensifying restructuring efforts for companies that fail to meet stock price and market capitalization thresholds.

According to data from the Korea Exchange and the Financial Supervisory Service's electronic disclosure system (DART), as of July 7, 38 companies on the KOSDAQ market and 10 on the KOSPI market have issued public notices expressing concerns about being designated as 'management-supervised stocks.' This designation typically occurs when a company's stock price falls below 1,000 won.

The stricter delisting rules aim to improve the quality of listed companies and enhance investor confidence. Companies struggling to maintain their stock prices or market valuations are now facing more rigorous scrutiny, potentially leading to their removal from the stock exchange if they cannot rectify their financial standing. This move is part of a broader government initiative to boost the overall value and health of the stock market.