During the first week of this year, EcoPro BM, a prominent stock in the KOSDAQ market, saw a surge in buying activity from foreign and institutional investors. This rapidly increased the stock price by approximately 13 percent, rising from 260,000 won ($198) to 310,000 won.
Experts in the finance and investment industry speculate that this sudden rise may be due to the possibility of EcoPro BM being transferred to the larger stock market, the KOSPI.
There were rumors in the industry that EcoPro BM might actively pursue an ‘up-listing’ within this year. Moving from smaller markets like KOSDAQ to larger ones like KOSPI is called up-listing.
In S. Korea, the stock market is divided into three tiers: KOSPI, which is for large corporations, KOSDAQ, which is for smaller companies with high growth potential, and KONEX, which is for emerging companies.
Between the 2nd and 5th of this period, foreign and institutional investors showed significant interest in EcoPro BM, resulting in the highest net buying for the company in the KOSDAQ market. Foreign investors bought $75 million worth of its stock, while institutional investors purchased $74 million in the same period, according to the Korean Exchange (KRX).
On the 5th, there was a surge in buying for EcoPro BM, with domestic institutions buying $112 million and foreign investors purchasing $68 million worth of shares. However, individual investors sold off $186 million worth of shares on the same day.
It is notable that this level of concentrated buying by foreign and domestic institutions is rare. This was the first time since the company’s listing in 2019 that domestic institutions’ daily net purchase amount exceeded $76 million, with the previous occurrence being on July 27, 2023.
In early Dec. 2023, EcoPro BM announced a long-term supply contract with Samsung SDI worth $33 billion for cathode materials. However, even with this announcement, the company’s stock price continued to decline.
Therefore, the industry suspects that there must be another reason for the recent 13 percent surge in the stock price on the 5th.
There are rumors that EcoPro BM may be listed on the KOSPI market soon, which has caused the stock prices to rise. The company is reportedly preparing for the up-listing internally, but it has not yet sent out a Request for Proposal (RFP) to select an underwriter or had any preliminary discussions with potential underwriters.
If EcoPro BM successfully transfers to the main KRX market, it could benefit from being included in Exchange-Traded Funds (ETFs) and receive an inflow of passive funds that pursue returns proportional to certain stock index increases.
