Ants Get Vaccinated... Holding Vaccine Stocks

Moderna, Pfizer, Novavax
Ranked Top 10 in Overseas Stock Net Purchases This Month

[Image source=AP Yonhap News]

[Asia Economy Reporter Minji Lee] Domestic investors have been actively purchasing vaccine-related stocks both domestically and internationally since the beginning of this month.

According to the securities information system SaveRo on the 19th, domestic investors ranked Moderna as the third most purchased stock this month, with net purchases worth 81.9 billion KRW. In addition, Novavax (32.2 billion KRW) and Pfizer (29 billion KRW) were among the top 10 net purchased stocks. BioNTech was also bought with net purchases worth 11.9 billion KRW.

The inclusion of vaccine-related stocks in domestic investors' portfolios is due to expectations following vaccine price increases and the U.S. Food and Drug Administration (FDA) likely approving booster shots to curb the spread of the Delta variant. The previous day, the U.S. Department of Health and Human Services (HHS) announced plans to offer booster shots to all Americans starting from the 20th of next month. On the day of the announcement, Moderna, Pfizer, and Novavax stocks fell by about 1-3%, but looking at the year-to-date gains, Moderna surged 265%, Novavax 100.9%, and Pfizer 34%. Since the beginning of this month, Moderna and Pfizer have risen 27% and 22%, respectively, while Novavax increased by 7%.

Junho Byun, a researcher at Heungkuk Securities, said, "Last month, as COVID-19 cases hit record highs, related stocks showed strong performance," adding, "With rising cases in developed countries with high vaccination rates, booster shots for their own citizens instead of vaccine distribution to other countries may cause vaccine supply disruptions."

Individual investors are also showing increased interest in vaccine-related stocks in the domestic market. SK Bioscience has been net purchased worth 217.6 billion KRW this month, during which its stock price surged about 89%. While expectations for AstraZeneca contract manufacturing (CMO) and Novavax contract manufacturing biosimilar (CDMO) had driven the stock price, the approval of the Phase 3 clinical trial for the domestically developed COVID-19 vaccine ‘GBP510’ has significantly boosted the stock price this month. Byungguk Park, a researcher at NH Investment & Securities, forecasted, “The stable net cash inflow through bio CMO enabling facility investments and the high likelihood of success for the domestic COVID-19 vaccine are factors that encourage further price increases.” On the other hand, individual investors responded by selling Samsung Biologics, which rose 11% this month due to expectations of Moderna vaccine CMO sales, with net sales of 236 billion KRW, which is analyzed as a result of increased profit-taking desires.

However, experts view the high stock prices of vaccine companies as burdensome. In the case of Moderna, Bank of America (BOA) evaluated, "Although COVID-19 vaccines play an important role, considering Moderna’s market capitalization (188 trillion KRW), it is questionable whether it significantly surpasses other major pharmaceutical companies." Yoonsoo Cho, a researcher at Yuanta Securities, stated, “Booster shot approval may increase vaccine demand by about 30-50% compared to now, but Moderna needs time to build a business model for other pipelines excluding the COVID-19 vaccine business,” adding, “It is necessary to consider the possibility that vaccine companies may record below-expectation performance after COVID-19.”

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