KOSDAQ Plummets: 30 Companies Face Delisting Amid Market Cap Shortfalls

The South Korean KOSDAQ stock market is witnessing a surge in companies at risk of delisting, with approximately 30 firms facing potential removal due to their market capitalization falling below the mandated level. This trend has intensified over the past month, with an average of one company per day issuing notices of potential management-related issues stemming from insufficient market cap.

The recent sharp downturn in the KOSDAQ market, which saw a 21.4% drop in July, has significantly impacted these companies. The situation is further complicated by new listing maintenance standards introduced in February as part of the government's "Value-up Program." Effective from July 1, the minimum market capitalization requirement for KOSDAQ companies was raised to 20 billion won, up from previous levels.

Financial investment industry professionals are calling for a review of the current delisting criteria. They argue that many companies facing these issues have sound fundamentals and capital but are being disproportionately affected by broader market volatility. There is a growing sentiment that the sole reliance on market capitalization as a metric for listing maintenance may need supplementary measures to account for market fluctuations and prevent unwarranted delistings.