KOSDAQ in on Fire! Korean Government Encourages Investment in KOSDAQ Companies by Pension Funds
KOSDAQ has been on fire in the past week. KOSDAQ is up 20% in the past one week, outperforming KOSPI which is up 5.4% in the same period.
One of the key reasons why KOSDAQ has been on fire is mainly due to expectation of the Korean government encouraging capital inflow into the KOSDAQ listed companies.
Korean government will encourage investment in the KOSDAQ by incorporating the KOSDAQ index into the evaluation criteria for the management of pension funds’ assets, which amount to 1,400 trillion won.
On 29 January, the KOSDAQ index was up 2.7% to 1,164, again outperforming KOSPI which was up 1% to 5,221. In fact, KOSDAQ has been on fire in the past week. KOSDAQ is up 20% in the past one week, outperforming KOSPI which is up 5.4% in the same period. KOSDAQ is up 25.8% YTD, slightly outperforming KOSPI which is up 23.8% YTD. However, KOSPI has significantly outperformed KOSDAQ (KOSPI up 95.2% vs KOSDAQ which is up 33.2% in the same period).
One of the key reasons why KOSDAQ has been on fire this past week is mainly due to expectation of the Korean government encouraging capital inflow into the KOSDAQ listed companies (see our recent insight KOSDAQ’s 7% Rise Today - A Fake Reversal or Sustainable by a Potential 17 Trillion Won Inflow?).
The Korean government did not formally announce important measures to actually encourage capital inflow into KOSDAQ listed companies. Rather, they were mostly discussed in the media, without actual formal government announcements. However, that changed today.
