The trading board at Hana Bank's dealing room in Jung-gu, Seoul, displays the Kospi and other market indexes on Tuesday. The Kosdaq closed down 24.00 points, or 2.29 percent, at 1026.03 that day. [Yonhap]
The trading board at Hana Bank's dealing room in Jung-gu, Seoul, displays the Kospi and other market indexes on Tuesday. The Kosdaq closed down 24.00 points, or 2.29 percent, at 1026.03 that day. [Yonhap]

Investor sentiment in the Kosdaq market has turned cold, with nearly every sector closing lower. Declining stocks outnumbered advancers by nearly three to one, and the advance-decline ratio — a gauge of the market's internal health — fell below 50 percent. All 38 sectors tracked on the market finished in the red except telecommunications.

Market participants are looking to the National Growth Fund, which begins full deployment this year, as a potential new source of capital for Kosdaq growth companies.

According to Korea Exchange data, the Kosdaq closed down 24.00 points, or 2.29 percent, at 1026.03 on Monday.

Telecommunications was the only sector to finish higher, gaining 0.35 percent. The Kosdaq 150 materials sub-index led declines, falling 3.76 percent, followed by construction (-3.48 percent), transportation equipment and parts (-3.17 percent), Kosdaq 150 industrials (-3.12 percent) and chemicals (-2.95 percent).

The market's internal picture was bleaker than the headline index decline suggested. Only 452 stocks advanced on the Kosdaq while 1,266 fell, with 64 unchanged. Seven stocks hit the upper limit and one hit the lower limit, underscoring the sharp divergence among individual names.

The advance-decline ratio came in at 47.72 percent. The indicator divides the cumulative number of advancing stocks over the past 20 trading sessions by the cumulative number of declining stocks, expressed as a percentage. A reading below 100 percent generally signals that declining stocks outnumber advancers.

Market observers say investor appetite for Kosdaq growth stocks has been shrinking broadly. Capital has been flowing toward large-cap stocks and semiconductor companies with more visible earnings, leaving smaller growth names relatively neglected. The Kosdaq's structurally weak supply-demand dynamics are also cited as a factor constraining any recovery in sentiment.

Yoon Jae-hong, a researcher at Mirae Asset Securities, said the negative perception of the Kosdaq stems from a capital-raising structure in which market capitalization has grown far faster than the index itself. "Over the past 20 years, the Kosdaq's average annual return has been just 2 percent, while market capitalization has grown at an average annual rate of 11 percent," he said.

Yoon added that repeated rights offerings, physical spin-offs and a lack of shareholder returns by listed companies have eroded market trust, while the retail-heavy investor base has limited the inflow of long-term capital.

Still, some in the market see the National Growth Fund as a potential new capital channel for the Kosdaq.

The National Growth Fund is a policy fund backed by the Advanced Strategic Industries Fund and private capital, targeting total deployment of 150 trillion won (about $99.3 billion) over the next five years. It aims to foster 12 advanced strategic industries — including AI, semiconductors, biotech, secondary batteries, next-generation vehicles and hydrogen — with roughly 30 trillion won slated for disbursement this year.

Yeom Dong-chan, a researcher at Korea Investment & Securities, said the fund's primary purpose is to supply capital so that companies with advanced technology can scale up smoothly. "The funding is more likely to flow to venture companies than to mid-sized firms, and to Kosdaq-listed companies rather than those on the Kospi," he said.

He added that companies investing more than 30 percent of their sales in research and development or capital expenditure while still running at a loss would likely be the main recipients of policy funding. "Among Kosdaq-listed companies, pharmaceutical and biotech firms, IT companies, robot makers and aerospace companies that meet those criteria stand a good chance of benefiting," he said.


hajun825@heraldcorp.com