President Lee Jae-myung Emphasizes KOSDAQ Market Revitalization

President Lee Jae-myung discussed measures to revitalize the KOSDAQ market, a crucial funding channel for small and medium-sized enterprises (SMEs) and venture firms with high growth potential, with representatives from these companies. The government formulated plans to establish a growth ladder system for innovative enterprises during the meeting. President Lee had previously addressed KOSDAQ market issues on social media on January 29th, and the government has been pursuing specific strategies to build this growth ladder and invigorate the KOSDAQ market through the capital market stabilization and normalization meeting.

The Korean stock market is divided into KOSPI, KOSDAQ, and KONEX. KOSDAQ's stock index returns over the past decade (80%) have been significantly lower than KOSPI's 173%. The sluggish performance of the KOSDAQ market, despite an increase in new listings, is attributed to the presence of financially weak companies remaining on the market and suppressing index growth. President Lee likened the stock exchange to a department store, pointing out the issue of non-value products being left on shelves.

The government has revamped the system to facilitate swift delisting of underperforming companies, moving away from a structure where market entry was easy but exit was difficult. Measures include strengthening delisting criteria and injecting liquidity.

To encourage institutional investment, a 10% income tax credit will be offered for investments in KOSDAQ venture funds, up to an annual limit of 20 million won. Additionally, the priority allocation ratio for initial public offerings (IPOs) will be increased from 25% to 30%.