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Major KOSDAQ firms meet up with foreign investors

SINGAPORE -- The recent rout in the global financial market has amplified, among other things, the high volatility of the tech-heavy KOSDAQ stock market in South Korea, with many of its small and midsize firms’ shares varying wildly. 

Benjamin Ng, managing director of Whitefield Capital Management Pte (Yang Sung-jin/The Korea Herald)
Benjamin Ng, managing director of Whitefield Capital Management Pte (Yang Sung-jin/The Korea Herald)

Jin Soo-hyung, president of KOSDAQ Market Division at Korea Exchange (Yang Sung-jin/The Korea Herald)
Jin Soo-hyung, president of KOSDAQ Market Division at Korea Exchange (Yang Sung-jin/The Korea Herald)


But the fact remains that many of the KOSDAQ-listed Korean companies with cutting-edge technologies and high-quality services form the very foundation of the country’s push for an innovative and creative business sector.

While foreign investors are relatively familiar with Korea’s blue chips such as Samsung Electronics, they have few chances to take a close look at such KOSDAQ companies with promising business items for long-term investment.

“The KOSDAQ Global Investors Conference,” organized by Korea Exchange and KOSDAQ Listed Companies Association, is aimed at offering such companies a chance to meet fund managers and analysts in overseas markets. The first session of the conference was held in Singapore on Wednesday, and the second is scheduled to take place in Hong Kong on Friday.

Twelve KOSDAQ frontrunners have joined the conference: Celltrion Inc., GemVax & KAEL Co., POSCO ICT Co., Soulbrain Co., Sung Kwang Bend Co., Wonik IPS Co, Komipharm International Co., Crucialtec Co, Mode Tour Network Inc., LMS Co., Korteck Corp., IM Co.

At the first session held on Wednesday at Ritz-Carlton hotel in Singapore, 47 one-on-one meetings were held between the participating companies’ officials and Singapore-based fund managers and analysts, KRX said.

“Despite the fact that good companies with potential are listed on KOSDAQ market and they deserve the interest of foreign investors, participants of foreign investors in KOSDAQ is low,” said Jin Soo-hyung, president of KOSDAQ Market Division at KRX, in a keynote speech for the conference. “One of the reasons is that foreign investors are not familiar with KOSDAQ market and its listed companies.”

Jin said KRX and its partners would organize investor conferences to provide more data on the tech-oriented stock market to foreign investors, raising profiles of and confidence in innovative Korean companies.

The 12 KOSDAQ-listed firms at the conference represent a combined market capitalization of 10.2 trillion won, or about 10 percent of the KOSDAQ’s total, a balanced representation customized for foreign investors interested in Korean firms.

KRX’s Jin said that for fund managers in Asia and beyond the KOSDAQ market is an ideal place for detecting and observing new trends among growth-oriented enterprises. Korean firms listed on the KOSDAQ focused on telecommunications and software in the early 2000s, before shifting toward Internet, semiconductor and content business in the mid-2000s. In recent years, diversification is visible, with new entrants opting for bio-technology, e-learning and renewable energy.

“Currently, the proportion of companies from future growth engine industries including IT, bio-technology and cultural content is over 50 percent,” Jin said.

Benjamin Ng, managing director of Whitefield Capital Management Pte which maintains a stake in 10 Korean companies including some on the KOSDAQ, said the conference is “beneficial for investors and companies alike” as both sides can meet up and get a chance to form networks and exchange more information.

“I think the KOSDAQ market tends to have smaller and medium size companies, and we invest in this type of companies because they are smaller, so they tend to have higher growth rate and that’s what we are looking for,” he said. “This is a good event, because it brings out companies and gives investors like us to have a chance to meet up with companies.”

Despite the gloom in the financial market, the current undulations in the stock market, he noted, provide investors an opportunity for buying shares in leading companies at good prices.

Jonathan Ng, deputy head of research at CIMB Research Pte who has been covering the Asia-Pacific technology sector for 17 years, said Korean firms should pay more attention to the language barrier that is hampering the flow of information to foreign investors, adding that he could find “very little” information written in English about smaller Korean companies.

As for the conference, he appreciated the opportunities to see Korean companies: “Some of them are quite interesting, and I’d love to know more.”

Koo Hee-jin, executive managing director of Daishin Securities, co-sponsor of the conference, said that foreign investors are showing greater interest in Korea’s small firms with long-term growth potential. “Market volatility has gone up recently, but it’s all about long-term perspective, after all,” Koo said. “We hope foreign investors will discover new Korean firms through this kind of investor conference.”

By Yang Sung-jin (insight@heraldcorp.com)

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