Jang Kyung-ho, chairman of the KOSDAQ Association

Input 2021.03.16 13:48

Jang Kyung-ho, the new chairman of the KOSDAQ Association, stated that the KOSDAQ market should be conducted only for KOSDAQ companies with a certain size or larger in relation to the partial reopening of short selling. Short selling is an investment technique that makes a profit by borrowing and selling stocks when the stock price is expected to fall, and buying and repaying stocks when the stock price goes down.

At a press conference held on the 16th, Chairman Jang said, “Since the KOSDAQ market is focused on individual investors, it is difficult for SMEs to adequately cope with the distortion of corporate value and malicious market disruption caused by short selling.”

The financial authorities are planning to resume short selling on May 3, focusing on some large-cap stocks. Short selling in Korea has been banned for more than a year since March 16 last year to alleviate volatility in the stock market caused by the novel coronavirus infection (Corona 19).

Chairman Jang said, “Short selling has net functions that help market efficiency, such as price discovery, liquidity supply, and hedge (hedge) measures, but it also has side effects that cause damage to individuals and companies, such as disruption of market order and the possibility of unfair trade. “There is a need for proper regulation.”

He added, “I hope that short selling will resume only for KOSDAQ companies with a certain size, such as the top 30 companies in the KOSDAQ market capitalization or KRX 300 constituents,” he added. Here Celltrion Healthcare (091990), Kakao Games, Seegene (096530)Etc. are included.

Regarding the problem of falling investors’ trust due to owl disclosures and false disclosures by KOSDAQ listed companies, he pointed out that “Most companies are trying to transparently provide company information to investors, but some companies are losing trust due to unethical behavior.” .

He added, “The association will support companies to deliver corporate information with a sense of responsibility. We will support companies to adapt to changes in disclosure regulations through briefing sessions such as laws and disclosures, and support the practice of disclosure officers.”

Meanwhile, Chairman Jang expressed his ambition to develop an ESG model suitable for SMEs in line with changes such as ESG (environmental, social, governance) management and the 4th Industrial Revolution. It also announced plans to operate the KOSDAQ manpower bank to help develop manpower and technology.