KOSDAQ Riding the COVID Wave Surpasses KOSPI Trading Volume

Kosdaq Daily Average Trading Volume 8.984 Trillion KRW
4.796 Trillion KRW More Than Kospi
Leading for 4 Consecutive Trading Days

Individual Investors Account for 90%, Driving Surge in Trading
Shift to Pharmaceuticals and Bio Due to COVID-19
Foreigners and Institutions Focused on Healthcare Buying

[Asia Economy Reporters Koh Hyung-kwang and Park Ji-hwan] The daily trading value of the KOSDAQ market has surpassed that of its 'older brother,' the KOSPI market, since the beginning of this month. This surge in KOSDAQ trading value is attributed to individual investors, who had focused on buying blue-chip stocks including Samsung Electronics at the start of the year, shifting their investments to various thematic stocks such as pharmaceutical and bio stocks that experienced sharp price fluctuations following the spread of COVID-19.

According to the Korea Exchange on the 13th, the average daily trading value of KOSDAQ from the 1st to the previous day was 8.984 trillion KRW, exceeding KOSPI's 8.5043 trillion KRW by 479.6 billion KRW. For the past four consecutive trading days, KOSDAQ's trading value has outpaced KOSPI's. Notably, on the 11th, KOSDAQ's trading value reached 10.4478 trillion KRW, nearly 2.7 trillion KRW higher than KOSPI's 7.7527 trillion KRW. The total market capitalization of KOSDAQ was 251 trillion KRW based on the previous day's closing price, only one-fifth of KOSPI's 1,291 trillion KRW. Despite this, days when KOSDAQ's daily trading value exceeded KOSPI's have occurred frequently this year: twice in January, seven times in February, three times in March, and six times last month.

Compared to last year, the trading value has increased significantly. The average daily trading value of KOSDAQ this year was 7.691 trillion KRW, a 78.4% (3.382 trillion KRW) increase from last year's 4.309 trillion KRW. KOSPI's average daily trading value also rose by 77.2% (3.855 trillion KRW) to 8.845 trillion KRW this year from 4.99 trillion KRW last year. This increase in trading value is believed to be due to the frequent rollercoaster market conditions caused by the COVID-19 pandemic, which led to a surge in trading activity exploiting these fluctuations.

The surge in KOSDAQ trading has been driven by individual investors. Among the recent four trading days when KOSDAQ's trading value exceeded KOSPI's, the proportion of individual trading volume was 89.9%, nearly 90%. Considering that the individual trading proportion in KOSDAQ was 83.9% in January before the COVID-19 outbreak, this represents a significant increase.

The influx of individual investment funds is underpinned by expectations for the pharmaceutical and bio sectors. Examining the stocks that foreign and institutional investors have focused on buying this month reveals categories such as healthcare and health functional foods, semiconductor materials, and equipment stocks. Among the stocks heavily purchased by foreigners in KOSDAQ, many were healthcare-related. The stock most purchased was HL Biopharma (HLB), with foreigners net buying 44.5 billion KRW worth of shares over six trading days this month. Other healthcare-related stocks such as Celltrion Healthcare (12 billion KRW), Komipharm (4.3 billion KRW), and KPS (3.5 billion KRW) also ranked high in net purchases. Stocks classified as health functional foods, including Nutri (6.3 billion KRW) and Kolmar BNH (4.3 billion KRW), were also favored by foreign investors.

Institutions also accumulated large amounts of healthcare stocks. The stock most purchased by institutional investors in the KOSDAQ market this month was Celltrion Healthcare, with net purchases worth 38.2 billion KRW. Seegene (35.3 billion KRW) and Celltrion Pharm (10.5 billion KRW) were also included.

The potential for earnings improvement has also increased. With the global spread of COVID-19, pharmaceutical exports have begun in earnest, and earnings growth is expected to continue smoothly through the first half of the year. Health functional food stocks, which have a market size of about 4.6 trillion KRW, are also expected to show visible earnings improvements this year as interest in immunity, which has risen sharply after COVID-19, grows.

Institutions have also focused on semiconductor-related stocks. Among the top net purchases this month are companies such as Wonik IPS (17.5 billion KRW), Techwing (15.6 billion KRW), Dongjin Semichem (14.8 billion KRW), SK Materials (8.8 billion KRW), and UniTest (7.5 billion KRW), most of which are related to semiconductor materials and equipment.

Researcher Lee Seung-woo of Eugene Investment & Securities explained, "After COVID-19, demand for big data, cloud, and artificial intelligence has increased further, raising the necessity for advanced semiconductor technologies that support these areas. The outlook for semiconductor material and equipment stocks is also bright."

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