KOSDAQ Market
KOSDAQ, short for Korea Securities Dealers Automated Quotations, is the South Korean secondary stock market, similar to the Nasdaq in the United States or Londons AIM. It was established in 1996 as a tech-specific stock exchange, aimed primarily at startups, venture capital companies and high growth companies. KOSDAQ is owned and operated by the Korea Exchange, the South Korean primary market, which also runs the KOSPI. KOSDAQ is actively used to make primary public offerings (IPOs), and secondary public offerings as well.
Over time, KOSDAQ has become one of the top markets in the world. As of 2020, KOSDAQ is ranked eighth in terms of market capitalization, and is home to more than 500 companies. It is the second-largest stock exchange in South Korea, after the KOSPI.
KOSDAQs investment style differs from the KOSPI in several ways. While the KOSPI is dominated by large, established companies, KOSDAQ has a concentration of younger, smaller companies. It features high growth, tech-oriented companies that specialize in everything from biotech to software to cleantech. All tech or small companies listed on KOSDAQ are expected to hit the key operating ratios of the Stock Exchange.
One of the key benefits of listing on KOSDAQ over the KOSPI is that companies can gain access to capital without going through a costly and time- consuming IPO. For South Korean startups and other businesses, KOSDAQ is a crucial source of funding and liquidity, providing a platform to raise essential capital and support their growth.
As with any other security exchange, companies choose to list on KOSDAQ voluntarily and have to comply with certain requirements. The process is relatively fast and simple, and due to the criteria, there is less stringent regulation when compared to the KOSPI. Because of this, companies listing on KOSDAQ are able to go public much more quickly than those on the KOSPI.
KOSDAQ has seen an impressive transformation since its launch in 1996. It has grown to become a force in South Koreas tech-centric economy, providing much needed access to capital and liquidity to many new, innovative companies. Companies choosing to list on KOSDAQ can take advantage of its perceived low entry barriers and fast growth rate. This has made it an attractive exchange for new and innovative tech-oriented businesses. Whether you are looking for a platform to launch your startup or an exchange to access capital for a larger venture, KOSDAQ is a great option for South Korean companies of all sizes.
