Foreigners 'Jupjup' Bio Collecting

[Asia Economy Reporter Hyunseok Yoo] It has been revealed that foreigners are concentrating their purchases on bio companies in the KOSDAQ market.

According to the Korea Exchange on the 1st, the top stock in net foreign purchases last month was Celltrion Healthcare, with a total purchase amount of 162.36 billion KRW (2,448,000 shares). This was followed by Pearl Abyss (70.074 billion KRW), HL Biopharma (44.668 billion KRW), HL Biopharma Life Science (34.091 billion KRW), GemVax (32.793 billion KRW), Helixmith (32.793 billion KRW), L&F (18.737 billion KRW), Komipharm (18.067 billion KRW), Alteogen (17.789 billion KRW), and Celltrion Pharm (17.329 billion KRW).

In particular, among the companies recently net purchased by foreigners, most were bio-related companies. Eight out of the top 10 stocks in net foreign purchases were bio stocks. Along with this, the stocks purchased by foreigners also showed significant price increases. Celltrion Healthcare, the largest company by market capitalization on KOSDAQ, hit the daily upper limit price the previous day. Additionally, Celltrion Pharm, which was designated as a short-term overheated stock due to a recent sharp price surge and subjected to single-price trading, rose by 20.15%, reaching 4th place in KOSDAQ market capitalization for the first time since its listing. Furthermore, Komipharm rose 33% last month, and Helixmith also increased by 10.63%.

The industry interprets the rise of these stocks as an effect of the short-selling ban policy. As the financial authorities implemented a six-month ban on short selling, Celltrion group stocks with high short-selling balance ratios have benefited.

Looking at Celltrion's short-selling balance from the 11th to the 26th of last month, short sellers repaid about 1.12 million shares. Also, net foreign purchases reached about 1.87 million shares by the 31st. Considering that foreign investors have consistently been selling in the Korean stock market, the concentrated foreign buying in Celltrion is seen as short covering to liquidate short-selling positions. The situation is similar for Celltrion Healthcare. Since the 11th of last month, about 940,000 shares of short covering occurred, and net foreign purchases reached about 2.58 million shares by the 31st. This is also presumed to be foreigners liquidating short-selling positions. Celltrion Healthcare's stock price rose 38.43% last month.

With the short-selling ban in effect for less than a month, the reason foreign short sellers are hurriedly liquidating positions is widely believed to be due to aggressive economic stimulus measures worldwide, which have brought the stock market close to its bottom.

In particular, besides Celltrion, the market is looking for stocks that could benefit next from short-selling buybacks after Celltrion group stocks. The industry has predicted that Celltrion Healthcare, Helixmith, HL Biopharma Life Science, Komipharm, and SillaJen could benefit from this government measure based on short-selling balance criteria. Among these, HL Biopharma had a relatively low stock price increase.

An HL Biopharma official said, "It was even mentioned as the stock with the highest short-selling balance ratio across both the KOSPI and KOSDAQ markets," adding, "Since the 11th of last month, short covering was only about 320,000 shares, and even if the 140,000 shares purchased on the 31st are considered short covering, net foreign purchases during this period amounted to only about 560,000 shares."

Meanwhile, Byungyong Oh, a researcher at Hanyang Securities, said, "Japanese companies such as Takeda, Astellas, Daiichi Sankyo, and Eisai have grown into global top 50 pharmaceutical companies over the past decade by acquiring US and European biotech firms," adding, "HL Biopharma is also rapidly expanding its bio business through mergers and acquisitions (M&A). Recently, it acquired Immunomic Therapeutics in the US and the anticancer drug Apealea, and more acquisition news is expected to follow this year."

This content was produced with the assistance of AI translation services.