Pajukjise KOSDAQ, Hovering Above Previous Highs Again

Rising for 10 Consecutive Trading Days, Recovering 1050 Level
Individual Investors Lead the Rebound
Foreigners Also Support Shift to Buying
Transportation Equipment and Parts Sector Strong

[Asia Economy Reporter Song Hwajeong] The KOSDAQ has risen for 10 consecutive trading days recently, recovering last month's losses and challenging to set a new all-time high again.

As of 10:05 a.m. on the 6th, the KOSDAQ recorded 1,055.27 points, up 1.42 points (0.13%) from the previous day. After starting the day with an upward trend and briefly turning bearish, the KOSDAQ reversed to rise again.

The KOSDAQ has risen for 10 consecutive trading days up to the previous session, mostly recovering the previous decline. This is the longest consecutive rise since the 11 consecutive trading days from July 27 to August 10 last year. Due to last month's market correction, the KOSDAQ fell below the 1,000-point level on the 19th and dropped to the 960-point level on the 20th. Since then, it has rebounded and recovered to the 1,050-point level. As the KOSDAQ continues its upward trend, attention is focused on whether it will break its previous high. The KOSDAQ recorded an all-time high at the 1,060-point level on the 9th. Starting the year at 977.62, the KOSDAQ has risen 7.8% year-to-date.

The rebound in the KOSDAQ was led by individual investors. Individuals have net purchased 319.1 billion KRW in the KOSDAQ over the past ten days. They also recorded seven consecutive trading days of net buying from the 25th of last month to the 2nd of this month. On this day as well, they are net buying over 95 billion KRW. Foreign investors also contributed. Foreigners, who led the market correction with selling pressure in August, have recently turned to buying. They purchased 172.2 billion KRW in the KOSDAQ over ten days. Meanwhile, institutions net sold 308.8 billion KRW during the same period.

By sector, the transportation equipment and parts sector showed remarkable strength, rising 26.42% over ten days. Other sectors with double-digit increases included non-metal (13.6%), digital content (13.58%), construction (13.45%), broadcasting services (11.17%), metals (13.09%), IT software & SVC (10.76%), and telecommunications broadcasting services (10.64%).

With the recent successful market rebound, it is expected that breaking the previous high will not be difficult. Kim Younghwan, a researcher at NH Investment & Securities, analyzed, "The KOSDAQ is realizing a steeper V-shaped rebound compared to the KOSPI," adding, "Following the short-term index rebound, a stock-specific market is expected, and the outperformance of small and mid-cap stocks, which are relatively free from macro momentum peak-out and earnings forecast slowdown, has appeared."

The KOSDAQ's rate of increase has outperformed the KOSPI for three consecutive months. According to the Korea Exchange, the KOSDAQ rose 0.69% last month, while the KOSPI fell 0.09% during the same period. The phenomenon of the KOSDAQ's rise exceeding the KOSPI's has continued since June. The KOSDAQ rose 4.9% and 0.11% in June and July, respectively. During the same period, the KOSPI rose 2.89% and fell 2.86%. The KOSDAQ's outperformance over the KOSPI for three consecutive months is the first since the four months from February to May last year. Last month's rise was particularly steep. Starting at 1,031.14, it fell 6.13% to 967.90 on the 20th, exceeding the KOSPI's decline (-4.42%) during the same period, but then reversed to an upward trend, surpassing the KOSPI's rate of increase.

The solid earnings growth of KOSDAQ companies is also expected to support the index's rise. According to Korea Investment & Securities, the combined earnings of KOSDAQ-listed companies in the second quarter recorded sales of 63.9 trillion KRW and operating profit of 4.5 trillion KRW, increasing 20.8% and 33.5%, respectively, compared to the same period last year. This is the highest quarterly performance ever. Researcher Ina Ye of Korea Investment & Securities said, "Looking at the past valuation trends of the KOSDAQ, the 12-month forward price-to-earnings ratio (PER) exceeded 20 times during the period when combined operating profit surpassed 10 trillion KRW since 2017," adding, "With expected earnings growth based on economic recovery and base effects this year, it is an opportunity to include mid- to long-term growth stocks with high earnings visibility during periods of increased volatility."

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