Bio Stocks to Maintain Positive Investor Sentiment Through Year-End

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[Asia Economy Reporter Song Hwajeong] Amid the recent sharp decline in the stock market, pharmaceutical and bio stocks showed a favorable price trend. SK Securities forecasted that positive investment sentiment toward pharmaceutical and bio stocks would continue until the end of the year.

According to the Korea Exchange on the 16th, the KOSPI Pharmaceuticals Index rose 4.3% over the past week. In contrast, the KOSPI itself fell 3.3% during the same period. Dalmi Lee, a researcher at SK Securities, analyzed, "The recent rise in pharmaceutical and bio stocks appears to be influenced by supply-demand issues and positive news within the industry affecting investment sentiment. In particular, despite ongoing COVID-19 vaccinations due to the increase in confirmed cases and the spread of the Delta variant, concerns that COVID-19 may persist for a long time have led to a notable rise in the stock prices of related beneficiary stocks."

First, on the 10th, the government approved the Phase 3 clinical trial of the COVID-19 vaccine 'GBP510' developed by SK Bioscience due to vaccine supply disruptions, raising expectations for commercialization next year. SK Bioscience surged 29.68% on the 10th and has risen 69.71% so far this month.

Additionally, by reiterating its commitment to supporting domestic vaccine development, expectations for the launch of a Korean COVID-19 vaccine contributed to the stock price increase. In the case of Celltrion, its COVID-19 treatment 'Rekkirona' received emergency use authorization in Brazil, resulting in strong stock performance. Celltrion Pharm rose 11.68% last week.

Researcher Lee stated, "Not only these positive events but also the outlook that earnings in the second half will be better than in the first half suggest that sentiment will remain positive until the end of the year. We maintain an 'overweight' rating on the pharmaceutical and bio sector, and low-price buying demand remains effective."

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