25% of Kosdaq Firms Survive for Over 4 Yrs.
By Yoon Ja-young
Staff Reporter
Among the top 20 Kosdaq firms, only 25 percent remain on the list after four years, reflecting the high volatility of the junior, tech-heavy stock market. The economic recession is also troubling businesses struggling in a market scarred by irregularities.
According to the Korea Exchange, the country's bourse operator, only five among the 20 firms that were included on the top 20 list on the junior stock market at the end of 2004, survived as of the end of last year. The five survivors are SK broadband, Daum, CJ Home Shopping, GS Home Shopping and Dongsuh.
Most of the others in the 2004 list, including LG Micron, ReignCom and CJ Internet, were gone by 2008, while PKL, a semiconductor material company, has been de-listed.
NHN, LG Telecom, and Asiana Airlines, which were among the top five, moved to the main bourse, making the weak junior market dwindle further.
The cash-cow companies were substituted by stocks that rose on themes of the time. Alternative energy stocks like Taewoong, PSM and Unison emerged in the new top 20, and education stocks like Mega Study and Credu became new lords of the junior market.
On the main bourse, 12 companies, including Samsung Electronics, POSCO and SK Telecom remained on the top 20 list after four years, much more stable than the junior market.
Added to the high volatility, the junior market has been tarnished by stock price rigging, embezzlement and other irregular activities.
The number of bad-faith filings also surged as companies failed to fulfill their business plans due to the economic recession.
According to the stock market operator, the number of listed companies noted for these filings has reached 12 so far this year, four times that of a year ago.
It explained that some businesses that filed a signing of a sales contract or capital increase plan had the filing withdrawn due to the tough economic and financial market conditions. The bourse operator said filings that damage investor confidence will be strictly regulated.