Number of ICT businesses on KOSDAQ market is on decline. Percentage of market capitalization of ICT businesses that was responsible for almost half of market capitalization of KOSDAQ at the end of 2009 fell to about 30%. Number of ICT businesses listed on KOSDAQ also went down by half compared to last year.
It is difficult to see new ICT businesses that are being listed on KOSDAQ. Pharmaceutical companies and bio-companies are replacing spots for ICT businesses. Level of interests towards promising ICT companies listed on KOSDAQ is decreasing despite venture investments from outside markets.
According to Korea Exchange (KRX), number of ICT businesses listed on KOSDAQ by the end of the 6th was 449 that is 4 less than end of last year. Although number of listed companies on KOSDAQ increased from 1267 to 1286, number of listed ICT businesses actually went down.
Percentage of ICT businesses within KOSDAQ market went down to 34.91%. At the end of 2009, there were 436 ICT businesses out of 1,028 listed companies which is equivalent to 42.41%.
Percentage of market capitalization responsible by ICT businesses within KOSDAQ is declining fast. At the end of 2009, $36.6 billion (41 trillion KRW) out of $76.9 billion (86 trillion KRW) of market capitalization was responsible by ICT businesses (47.82%).
Potential values of ICT businesses that reached almost half of KOSDAQ’s market capitalization at one point are on downward trend. Percentage of market capitalization responsible by ICT businesses went up temporarily at the end of 2014 and it went below 40% after 2015. It started recording a percentage lower than that of listed companies.
While entire market capitalization of KOSDAQ went up from $76.9 billion (86 trillion KRW) to $205 billion (229 trillion KRW), market capitalization of ICT businesses went up from $36.6 billion (41 trillion KRW) to $64.3 billion (72 trillion KRW).
As percentage of pharmaceutical companies and bio-companies within KOSDAQ continues to grow, percentage of ICT businesses has gone down naturally. As Kakao, which had represented ICT businesses within KOSDAQ, moved from KOSDAQ to securities market last year, percentage of market capitalization responsible by ICT businesses has gone down even more. While level of expectations towards growth of ICT businesses has gone down, level of expectations towards new types of businesses has gone up.
This trend started around 2014. According to an annual factual survey on ICT businesses issued by Ministry of Science and ICT, amount of sales and exports from entire ICT businesses is showing a downward trend. Entire sales of ICT businesses went down from $397 billion (444.7672 trillion KRW) in 2014 to $390 billion (436.2534 trillion KRW) in 2015 and to $387 billion (433.5333 trillion KRW) in 2016. Number of commercial workers has also been declining since 2015.
Level of expectations from financial investment industry towards ICT businesses within KOSDAQ market is also going down. Internally, KRX is saying that rather than focusing on ICT businesses, it is important to focus on listing various businesses.
Experts are emphasizing reformation of regulations more than others to have more ICT businesses listed on KOSDAQ.
“New ICT industries within Industry 4.0 field are still tied to regulations.” said Assistant Director Lee Jung-min of Korea Venture Business Association’s Innovative Venture Policy Research Institute. “South Korean Government must be active in reforming regulations for development of new industries since new attempts cannot be made.” Assistant Director Lee also said that Ministry of Information and Communication was in charge while South Korean ICT companies were growing rapidly from adoption of wired telecommunication and that there were not many regulations on new industries when wireless telecommunication was introduced since economic environment was not adequate due to IMF (International Monetary Fund) management system and others.
Staff Reporter Ryu, Geunil | ryuryu@etnews.com