Gains Spark Expectations of 'Sector Rotation' as Crackdown on 'Penny Stocks' Begins

[Anchor]

Today, the KOSPI surged significantly as not only semiconductors but various other sectors rose evenly. Meanwhile, as listing delisting requirements have been tightened to weed out troubled companies, 36 stocks, including so-called "penny stocks" whose shares are priced below 1,000 won, have been designated as administrative issues.

Reporter Kim Hye-min has the details.

[Reporter]

It was not just the two semiconductor giants that drove the KOSPI up by 3.6% today.

While Samsung Electronics surged 6.6% and SK Hynix jumped 5.5%, cosmetic stocks such as Kolmar Korea and Cosmax, as well as Doosan Enerbility and Samsung Electro-Mechanics, also showed strength.

During the sharp surge of the KOSPI this year, heavy concentration in semiconductors meant that decliners outnumbered gainers. However, entering this month, the number of advancing stocks has exceeded declining stocks on every single day except one.

The KOSPI 200 Volatility Index also dropped back into the 50s for the first time in three months.

Experts explained that this indicates a easing of market concentration, with signs of "sector rotation" emerging as stock prices rise across different industries in turn.

[Han Ji-young / Researcher, Kiwoom Securities: Unlike the rebounds following the sharp plunges in May and June, this recovery is not just concentrated in semiconductors; the warmth of sector rotation seems to be spreading much more broadly than before.]

Measures to strengthen the delisting of troubled companies from the stock market, aimed at resolving the "Korea Discount," have also officially taken effect.

Thirty-six companies have been designated as administrative issues, including so-called "penny stocks" with share prices failing to reach 1,000 won, as well as firms with market capitalizations falling short of 30 billion won for the KOSPI and 20 billion won for the KOSDAQ.

These are companies whose share prices stayed below 1,000 won for 30 consecutive trading days starting July 1, or those that fell short of the market capitalization criteria. If they fail to meet the standards for 45 out of 90 subsequent trading days, they will become subject to final delisting.

[Kang So-hyun / Senior Research Fellow, Korea Capital Market Institute: Regulations restricting the listing of penny stocks have been ongoing in the U.S. for a very long time. When trading volume is low and price volatility is high, it increases the likelihood that stock prices can be intentionally manipulated.]

However, concerns are also being raised that small and medium-sized enterprises (SMEs) whose share prices plummeted sharply—regardless of their earnings or financial health—due to recent stock market fluctuations could suffer damages.

The Korea Federation of SMEs has requested that the relevant criteria be supplemented and the implementation deferred.

(Photo: Seol Chi-hwan | Video Editing: Lee Sang-min | Design: Lee Jun-ho)
※ Please note: This article was translated by AI and may contain errors.