The KOSDAQ, which had risen to the top of the yield among major stock markets earlier this year, has recently collapsed. Analysts say that the upward momentum is also decreasing due to the sluggish economy, along with a sharp drop in secondary battery and bio sector stocks, which have a high proportion.
According to the Korea Exchange on the 27th, the KOSDAQ index closed at 707.49, down 1.25% from the previous trading day. The drop caused the KOSDAQ to fall 9.09% from its recent high of 778.27 on February 19. The monthly yield was -8.22%, the lowest among major indexes. Earlier this year, KOSDAQ also ranked No. 1 in annual growth among major stock markets.
The annual increase rate reached 14.75% until February 19, when it reached its peak, but it fell sharply to 4.32% due to the recent plunge. This contrasts with the 8.65% rise in the KOSPI during the same period.
Looking at the index by industry, KOSDAQ 150 industrial goods fell 17.57 percent for the month, contributing the most to the index's decline.
KOSDAQ 150 Healthcare followed with -13.08% and general services and electrical and electronic devices with -10.79% and -9.87%, respectively.
Industries that led the decline also have a high proportion of KOSDAQ. The ratio of the electrical and electronic industries is the highest at 16.91%, followed by pharmaceuticals at 16.81%, and machinery and equipment at 13.28%. When the proportions of these industries are added together, it is 47%, which is half of the market capitalization of KOSDAQ.
As the stock prices of large-cap stocks in the sector with a high proportion of the KOSDAQ fell sharply, KOSDAQ stocks seem to be falling along with the overall decline in the industry.
For the bio sector, market leader Alteogen fell 12.33% for the month. HLB also plunged 36.65% in the month after the US Food and Drug Administration (FDA) failed to approve a new drug for liver cancer. However, it rebounded 6.16% on the day due to the concentration of low-priced buying.
Although there is ample room for a rebound due to favorable factors for individual companies, tariff risks along with delays in the U.S. rate cut are also expected to increase uncertainty in the bio sector.
Lee Ji-won, a researcher at Heungkuk Securities, said, "The 25% tariff on drugs that U.S. President Donald Trump has constantly mentioned is a risk that can be realized at any time," adding, "We expect uncertainties in the pharmaceutical and bio industries to increase this year."
The secondary battery sector, which includes EcoproBM and others, has no clear upward momentum in technology and cost competitiveness along with continuing the electric vehicle "casms (temporary demand slowdown)." EcoproBM was down 19.25% for the month.
Regarding the secondary battery sector, Ianna Yuanta Securities, a researcher at Yuanta Securities, said, "The sector's investment attractiveness is low due to the lack of momentum in high valuation," adding, "Uncertainty is high until April after short selling resumes."
On the other hand, some analysts say that the entire market is shaken by companies with large market capitalization as small and medium-sized companies with a high proportion of KOSDAQ components fall in competitiveness. According to a survey released by the Korea Business Association in February, the proportion of marginal companies in the KOSPI stood at 10.9% as of the third quarter of last year, up 2.5 percentage points over eight years, compared to 23.7% on the KOSDAQ, up 17.1 percentage points over the same period.
It is interpreted that the index tends to be shaken by fluctuations in large stocks as supply and demand is concentrated on companies with large market capitalization in KOSDAQ due to the weakening competitiveness of small and medium-sized companies.
[Reporter Jeong Sangbong]
