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KONEX posts sluggish growth since launch: data

South Korea’s new venture-driven stock market has posted stagnant growth since its launch earlier this month, data showed Wednesday, as its low trading volume has dented investors’ sentiment.

The Korea New Exchange market saw its market capitalization reach 497.3 billion won ($446.6 million) Tuesday, a tad higher than 468.8 billion won tallied on July 1, the Korea Exchange data showed.

The KONEX market was officially launched earlier this month to foster the growth of young venture firms and lend support to the government’s “creative economy” vision, which aims to bolster the growth of start-up ventures and small firms in the country where conglomerates dominate the economy.

Of the 21 firms listed on the market, 14 companies saw their share price move up from the initial price by 19.36 percent on average over the cited period.

The average daily trading volume, however, came to 446.89 million won this month, falling sharply from the 1.3 billion won posted on the first trading day of the market, the data showed.

Only two firms’ shares were traded over all trading sessions through Tuesday this month, while a handful of stocks were bought and sold in fewer than three trading days, reflecting the stagnant trading activities in the market.

Market watchers said the sluggish growth came as the KONEX market provides limited liquidity as it bears a relatively high entry barrier for investors.

Only institutional investors or an individual with a deposit above 300 million won will be allowed to participate in the market.

The minimum amount of a transaction is 100 shares.

The bourse operator, meanwhile, plans to attract 50 firms with a combined market capitalization of 1.5 trillion won on the new bourse by the end of this year.

The first basket of the KONEX market covers five bio-technology firms, four chip-equipment manufacturers, three software firms, two auto parts markers and other firms from various sectors. (Yonhap News)