Market Rally Sparks Rotation Hopes; Crackdown Begins on Penny Stocks

[Anchor]

Yesterday, the KOSPI surged significantly as gains were evenly distributed across various sectors beyond just semiconductors.

As delisting requirements have been tightened to weed out troubled companies, 36 firms, including penny stocks trading 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%.

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

During the sharp market surge earlier this year, a concentration in semiconductors meant that declining issues outnumbered advancing ones. However, this month, except for a single day, the number of advancing issues has exceeded declining ones.

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

Experts explain that this indicates a lessening of market concentration, with signs of stock rotation emerging where prices in different sectors rise in turn.

[Han Ji-young / Researcher, Kiwoom Securities: Unlike the rebounds following the sharp drops in May and June, this bounce is not restricted to semiconductors; the warmth of market rotation seems to be spreading much more widely than before.]

Measures to strengthen the delisting of troubled companies in 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 whose share prices fall below 1,000 won, as well as firms with a market capitalization of less than 30 billion won on the KOSPI or 20 billion won on the KOSDAQ.

These are places where stock prices stayed below 1,000 won for 30 consecutive trading days starting July 1 or failed to meet market cap 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, Capital Market Research Institute: Rules restricting the listing of penny stocks have been ongoing in the U.S. for a long time. When trading volume is low and price volatility is high, the possibility of intentionally manipulating stock prices increases.]

However, concerns are also being raised that small and medium-sized enterprises whose share prices plummeted sharply due to recent stock market volatility, regardless of their performance or financial status, could suffer damage.

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

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