Only one company has listed on the Konex market this year. As promising firms bypass the junior board and head straight to Kosdaq, weakening Konex's role as a "growth ladder," Korea Exchange has pledged to strengthen stage-by-stage support for listed companies. But industry participants say regulatory fixes alone will not be enough to revive the market without a meaningful improvement in liquidity and an influx of quality firms.
According to Korea Exchange, Stechm — which listed in April — is the only company to have debuted on Konex this year. New listings have fallen sharply: from 14 each in 2022 and 2023, to six in 2024, four last year, and now just one.
The market has also shrunk. The number of listed companies has fallen 30.5 percent, from 154 in 2017 to 107 today, while market capitalization has dropped 46.7 percent — from 6.25 trillion won ($4.02 billion) in 2018 to 3.33 trillion won as of Wednesday. Liquidity has dried up just as quickly. Average daily trading value peaked at around 7.4 billion won in 2021 and has been declining since; on Wednesday, total turnover was limited to 421.19 million won. Of the 107 listed companies, 32 did not trade a single share all day.
Korea Exchange identifies the expansion of technology-track listings as the primary driver of Konex's decline, as more companies use that route to list directly on Kosdaq. "One of the main reasons for the low activity on the Konex market is that companies have come to prefer listing on Kosdaq," said Jin Hyeon-cheol, a team leader at Korea Exchange's Konex Market Division. "New Konex listings have been on a downward trend in recent years, while the share of companies entering Kosdaq via the technology-track listing route has held steady."
As the slump has dragged on, calls for a merger with Kosdaq have emerged. According to multiple market insiders, Korea Exchange internally reviewed a plan to integrate the two markets but concluded that absorbing Konex companies would conflict with its current policy direction — which focuses on restructuring Kosdaq segments and removing underperforming firms. Instead, the exchange decided to keep Konex as an incubation market for innovative companies and reinforce its growth-ladder function.
Support measures under the government's capital market structural improvement plan, announced in March, are also being rolled out in stages. Since June, the government has been covering 70 percent of external audit costs and designated adviser fees for Konex-listed companies, up to a ceiling of 90 million won each. To broaden institutional investor participation, the Konex investment fund — currently sized at 100 billion won — is set to expand to more than 200 billion won. Tax incentives for retail investors are also under review. Regulatory changes aimed at restoring liquidity took effect Wednesday: the minimum share float requirement for Konex-listed companies was raised from 5 percent to as much as 15 percent depending on years since listing, and the minimum number of dispersed shareholders was tightened to at least 50. The measures are designed to encourage founders and venture capital firms to sell existing shares, increasing the volume of stock available in the market.
From the second half of this year, Korea Exchange will also step up tailored support for Konex companies at each stage of their development. The exchange plans to introduce lifecycle consulting that links disclosure-system building, internal accounting management and Kosdaq transfer-listing support to a company's growth stage. Companies within their first year of listing will receive help establishing disclosure frameworks; those in their second or third year will have their internal accounting management systems reviewed; and firms preparing to move to Kosdaq will receive hands-on consulting from exchange staff with listing-review experience. Korea Exchange plans to recruit participating companies this month and run individual consulting sessions from August through November.
The industry broadly agrees, however, that regulatory improvements alone will not be enough to bring Konex back to life. The core problem, participants say, is a lack of liquidity rather than a lack of rules. As long as quality companies continue to bypass Konex and list directly on Kosdaq, support measures alone will struggle to attract both investors and issuers at the same time.
"Ultimately, money flows into a market only when investors actually want to buy into it," said one securities industry official. "The market can only recover if quality companies consistently list there, liquidity rises substantially, or investors are offered genuinely compelling tax benefits for putting money into Konex."
Jin of Korea Exchange acknowledged the trend but struck a more optimistic note. "It is true that direct Kosdaq listings via the technology track have increased, but Konex is an incubation market where companies accumulate listing experience and build disclosure and internal-control frameworks before growing into Kosdaq," he said. "We will continue to strengthen the foundation that allows innovative companies to grow naturally toward Kosdaq through tailored, stage-by-stage support."
hajun825@heraldcorp.com
