Kosdaq Falls on Innovation Setbacks
30 July, 2019
The tech-heavy Kosdaq index has fallen to levels last seen before President Moon Jae-in took office in May 2017.
The Kosdaq closed down four percent on Monday at 618.78 points, when the senior KOSPI fell 1.78 percent to barely above 2,000 points. Over the last three months the Kosdaq has plummeted 18 percent to the lowest level since April 14, 2017.
The Kosdaq surpassed 900 points at one point last year, when investor sentiment was buoyed by the government's "innovative growth" initiative and promised support for small and innovative businesses. But as they flopped, the gains have all dissipated.
But the junior bourse was also rocked by scandals surrounding big entertainment agencies, setbacks in groundbreaking medical treatment plus Uber-style ride sharing apps floundering on resistance from traditional taxi firms.
"Start-ups are the seeds of innovation, and they're facing obstacles in the form of red tape by the government and opposition from established lobbies," one analyst said.
The government says it favors innovation but has by and large stood aside when new businesses like ride-sharing apps, vacation rentals like Airbnb, and blockchain technology clashed with vested interests.
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