[Photo by Aju Economy]
KOSDAQ Delisting Criteria Tightened, Companies Scramble to Comply
The KOSDAQ market's new delisting criteria were implemented on July 1. Stocks priced under 1,000 won and those with a market capitalization below 20 billion won are now subject to delisting reviews, with actual delistings expected to begin in October. The Korea Exchange anticipates that 88 companies will be delisted this year, although market analysts predict the number could be much higher. Companies are making significant efforts to avoid delisting, with a 24-fold increase in stock consolidations in the first half of the year compared to last year, alongside a surge in CEO changes and contract disclosures.According to the Financial Supervisory Service's electronic disclosure system, there has been a notable increase in CEO changes, stock consolidations, and supply contract disclosures among KOSDAQ-listed companies since the announcement of stricter delisting criteria on February 12. Stock consolidations rose from eight cases last year to 188 in the first half of this year, a 23.5-fold increase, primarily as companies attempt to artificially boost their stock prices to meet the new delisting requirements.
South Korea's Exports Surpass $100 Billion for the First Time
South Korea's exports have exceeded $100 billion in a single month for the first time in history. The surge is attributed to a supercycle in semiconductors driven by increased investment in artificial intelligence (AI), along with strong performances in key sectors such as petroleum products, computers, and automobiles. South Korea is now the fourth country globally to achieve monthly exports of over $100 billion, raising expectations for reaching an annual export target of $1 trillion.The Ministry of Trade, Industry and Energy reported on July 1 that exports in June reached $102.25 billion, a 70.9% increase compared to the same month last year. This marks the first time monthly exports have surpassed $100 billion. South Korea joins Germany, China, and the United States as the only countries to achieve this milestone.
Financial Authorities to Address Key Issues Before Summer Break
Financial authorities are set to resolve major financial issues throughout July ahead of the summer break in August. They plan to finalize sanctions related to the improper sale of Hong Kong H-index linked securities (ELS) and the data breach incident involving Lotte Card, as well as announce improvements to the governance structure of financial holding companies.According to financial sector sources, the Financial Services Commission will sequentially approve penalties for ELS sellers and sanctions for Lotte Card during its regular meeting in July. These meetings are typically held biweekly on Wednesdays, with sessions scheduled for July 1, 15, and 29. As August approaches, financial authorities aim to address these key issues within the month.
The most closely watched topic is the sanctions related to ELS. Initially, the Financial Supervisory Service considered imposing fines of approximately 4 trillion won on five banks, including KB Kookmin, Shinhan, Hana, NH Nonghyup, and SC First Bank. However, after considering the banks' voluntary compensation efforts, the proposed fines were reduced to around 2 trillion won, and further discussions have lowered the amount to approximately 1.4 trillion won.
Bank of Korea Considers Tokenization of Government Bonds
Shin Hyun-sung, Governor of the Bank of Korea, has proposed a future vision that includes tokenizing financial assets such as government bonds to automate bond settlements and collateral management. Governor Shin presented a paper titled "Implementing the Integrated Currency: Lessons from Project Han River" at the European Central Bank (ECB) forum held in Sintra, Portugal, on June 30.Regarding the introduction of private payment tokens, or stablecoins, he noted, "The weakness is that the same 1 won does not always equate to the same 1 won. If the issuer's credibility falters, the value fluctuates, and even tokens with the same name are treated differently depending on which blockchain they are on." He emphasized that the Bank of Korea's digital currency testing is about two years ahead of major central banks. The ECB aims to develop a tokenized currency ecosystem through its "Apia Project," with a roadmap set for completion by 2028.
Political Tensions Rise After Controversial Committee Appointments
The Democratic Party faced backlash from the People Power Party after it unilaterally appointed chairs for ten standing committees and the Special Committee on Budget and Accounts, as well as adopted a personnel report for Prime Minister nominee Han Seung-soo during a parliamentary session on June 30. The People Power Party has declared strong opposition, including a boycott, leading to heightened tensions in the National Assembly.Political sources indicate that on July 1, both parties exchanged sharp criticisms over the Democratic Party's actions in the previous day's session. The Democratic Party urged the People Power Party to complete the appointments for the seven committee chairs allocated to the opposition. In contrast, the People Power Party accused the Democratic Party of monopolizing positions, labeling it as a form of legislative dictatorship and an obsession with the cancellation of President Lee Jae-myung's indictment. They warned that if such practices continue, the Democratic Party could face severe backlash.
* This article has been translated by AI.
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