Nearly One in Ten Korean Firms Face Delisting
Nearly one in 10 listed companies in South Korea has entered the range for possible delisting after failing to meet strengthened market capitalization requirements. With the threshold set to rise once more next year, about 19% of all listed firms are expected to face delisting risk, according to an
Nearly one in ten listed companies in South Korea faces potential delisting due to failing to meet increased market capitalization requirements, according to an analysis by Leaders Index. As of the end of July, 192 companies with an average market capitalization below the listing maintenance standard comprised 7.4% of all listed firms.
The minimum market capitalization has been raised to 30 billion won for the KOSPI and 20 billion won for the KOSDAQ, with a higher threshold of 50 billion won expected next year. About 19% of listed firms are expected to face delisting risk by then. The impact on the KOSDAQ market is more significant, with 8.7% of companies falling short of the standard and 21% expected to fail under the new requirements.
Share prices of "penny stocks" with an average closing price below 1,000 won have also raised concerns, as 12 companies were found to be in complete capital impairment. Industries such as household goods with a 16.9% shortfall ratio are particularly affected.
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