KOSDAQ Plummets as Global Markets Suffer Steepest Decline; Analysts See 'Bottom Fishing' Opportunity

The KOSDAQ index has plummeted, recording the sharpest decline among global stock markets in the past month, with a staggering 23.27% drop. This significant downturn is largely due to a strong inflow of capital into large-cap stocks, diverting attention and investment away from the mid- and small-cap companies that form the backbone of the KOSDAQ. The situation worsened with the introduction of leveraged Exchange Traded Funds (ETFs) based on major stocks like Samsung Electronics and SK Hynix, further intensifying the concentration of funds in large caps and severely impacting KOSDAQ's liquidity. Despite the sharp fall, securities firms believe the decline is more of a technical and supply-side shock rather than a reflection of fundamental weaknesses. They anticipate a potential rebound, especially if government policies aimed at bolstering the KOSDAQ and alleviating supply imbalances are effectively implemented. The government has already announced measures to support the market, including expanding the technology special listing system and improving conditions for institutional investors, signaling a commitment to revitalizing the KOSDAQ.

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If government policies ease the supply imbalance, the possibility of a rotation to mid- and small-cap growth stocks that have been neglected for a long time will increase.