Why is it urgent to examine relational risks in the stock market now: Economic arguments at a structural turning point?
Currently, the Korean stock market is in a critical phase where three structural changes intersect simultaneously. At this intersection, traditional financial indicators have already lost their leading power, and only relational risk checks can provide real leading signals.
1. Correlation between acceleration of capital polarization and rapid increase in CB issuance
From 2023 to 2025, KOSPI/KOSDAQ's private convertible bond (CB) issuance volume will amount to an annual average of KRW 12.3 trillion, a 2.1-fold increase compared to 2019. What is noteworthy is that 83.7% of these CBs are concentrated in companies with unstable management. As a result of RaymondsRisk v1.1's analysis of 3,109 KOSPI/KOSDAQ companies, in 85.9% of the companies that led to trading suspensions, the pattern of CB issuance → executive management → stock price surge → conversion/sale was captured in the network on average 14.3 months before the financial crisis.
Traditional financial indicators (PER, PBR, debt-to-equity ratio) remained in the “normal range” during this period. The network of relationships moves first.
2. Special characteristics of the 2025-2026 interest rate transition period
The U.S. Federal Reserve's entry into the interest rate cut cycle paradoxically amplifies relational risks in the Korean small-cap market. In the r>g structure (return on capital > economic growth rate) demonstrated by Piketty (2014), increased liquidity flows into the game of capital redistribution rather than productive investment. Specifically, the CB investor → executive network disruption → stock price stimulus cycle rotates faster fueled by low interest rate liquidity.
According to Stiglitz's (2012) information asymmetry theory, in this process, ordinary individual investors are structurally at an information disadvantage. Without network analysis, this asymmetry cannot be detected in advance.
3. Increase in the proportion of individual investors and structural vulnerability
As of 2026, the proportion of individual investors in KOSDAQ average daily trading is 77.3%. They participate in the market without being aware of the structure in which the CB investor-executive-major shareholder triangle network operates. Relational risk can proactively map where the damage from this structural information asymmetry is most concentrated.
Concluding argument: The stock market is currently in a structurally vulnerable phase where liquidity expansion, increase in individual investors, and CB overload are operating simultaneously. Relational risk checks are not optional, but an infrastructure-level necessity for investor protection.
Reference document:
Piketty, T., 2014, Capital in the Twenty-First Century (Harvard University Press)
Stiglitz, J., 2012, The Price of Inequality (W.W. Norton)
RaymondsRisk v1.1, 2025, KOSPI/KOSDAQ preliminary detection analysis results for 3,109 companies
Korea Exchange (KRX), 2026, trading trends by investor (KOSDAQ individual proportion 77.3%)
Financial Supervisory Service, 2025, statistics on private CB issuance status
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Risk spreads through relationships.
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