Alpha Generation from the New Entries in the 'KOSDAQ Rising Stars'
In this insight, we discuss the potential alpha generation from new entries in the "KOSDAQ Rising Stars."
For the KOSDAQ Rising Stars New Entries in 2023, there was a massive outperformance. Of course, we want to reiterate that past performance is NOT indicative of future performance.
On 28 August 2024, KRX provided a list of 39 KOSDAQ Rising Stars companies (including 29 existing ones and 10 new companies).
In this insight, we discuss the potential alpha generation from new entries in the "KOSDAQ Rising Stars." Every year, Korea Exchange (KRX) publishes a list of KOSDAQ Rising Stars. On 28 August 2024, KRX provided a list of 39 KOSDAQ Rising Stars companies (including 29 existing ones and 10 new companies).
Typically, the KRX publishes this list every year sometime in the summer (June to August). In this insight, we review the share price performances of the new companies that are added to this list in the past three years (2021 to 2023). We provide their share price performances over 12 months period after the public announcement of the KOSDAQ Rising Stars.
The back test data in the past three years show some interesting results:
For the KOSDAQ Rising Stars New Entries in 2023 (announced on 6 July 2023), there was a massive outperformance. The 8 new stocks in this entry were up on average 161.3% for one year period after 6 July 2023, soundly beating KOSDAQ which was down 2.6% in the same period. Among the 8 stocks, Techwing Inc (089030 KS), Enchem (348370 KS), and Neosem had particularly outstanding share price performance.
Keep reading with a 7-day free trial
Subscribe to Douglas Research Insights to keep reading this post and get 7 days of free access to the full post archives.