In the Volatile Market, All BBIG Stocks Except Secondary Batteries Declined

[Asia Economy Reporter Minji Lee] The BBIG (Battery, Bio, Internet, Game) index, composed of growth stocks, has shown a sluggish performance since the beginning of this month. This is the result of most stocks, except those related to secondary batteries, showing a downward trend.

According to the Korea Exchange on the 27th, the KRX BBIG K-New Deal Index fell by 6.77% this month, showing a larger decline than other thematic indices. During the same period, it dropped nearly three times more than the KOSPI (2.31%). The BBIG K-New Deal Index is composed of the top market capitalization stocks in the battery, bio, internet, and game sectors. Included stocks are NAVER, Kakao, Douzone Bizon, Samsung Biologics, Celltrion, SK Bioscience, NCSoft, Netmarble, Krafton, Samsung SDI, LG Chem, and SK Innovation.

The decline in the bio, internet, and game sectors, excluding the battery index, is interpreted as the main factor pulling down the index. Looking at individual indices, the KRX Bio K-New Deal Index fell the most, down 8.36% during the same period. The Internet K-New Deal Index dropped 5.39%, and the Game K-New Deal Index also fell 5.38%. On the other hand, the Secondary Battery K-New Deal Index rose 3.30%, continuing its upward trend.

The internet index was affected by the decline of NAVER and Kakao, which have the highest market capitalization, due to 'big tech regulations.' These two stocks fell by 7% and 21%, respectively, this month, trading around 400,000 KRW and 120,000 KRW. Kakao, which was relatively more impacted, is facing growing skepticism about its growth speed, leading securities firms to adopt a more conservative stance. Sung Jonghwa, a researcher at Ebest Investment & Securities, said, "Regulations on platform businesses inevitably act as a downward factor for value because they affect the scope, depth, and speed of business," adding, "We have lowered the target price by 17% from before, setting it at 150,000 KRW."

Most stocks in the bio index showed a downward trend. Samsung Biologics and Celltrion, related to biosimilars, fell by 4% and 6.3%, respectively, and SK Bioscience also dropped by 6.3% and 12%. The stagnation in earnings of most bio companies and the absence of positive developments such as new drug development that could boost stock prices are analyzed as burdens. Regarding the game-related index, following the poor performance of the top market cap stock NCSoft (-10%), concerns about intensified regulations by the Chinese government have surfaced, resulting in a sluggish trend.

Most stocks included in the Secondary Battery K-New Deal Index continued their upward trend. The constituent stocks are LG Chem, Samsung SDI, SK Innovation, SK IE Technology, POSCO Chemical, EcoPro BM, SKC, L&F, Iljin Materials, and Soulbrain, most of which have shown gains this month. Although investor sentiment cooled for major cell manufacturers Samsung SDI (-8.4%) and SK Innovation (0.8%) following GM's Chevrolet Bolt recall announcement, the index was driven up by relatively large gains in material suppliers. In particular, EcoPro BM, which produces cathode materials, surged 53%, buoyed by a 10 trillion KRW cathode material sales contract with SK Innovation. L&F also rose 64%, with positive expectations about a large-scale cathode material supply contract worth over 5 trillion KRW with Tesla.

Jang Jeonghun, a researcher at Samsung Securities, analyzed, "The growth visibility in the front-end market has expanded across the entire material value chain to cell manufacturers, highlighting the rise in related stocks," adding, "Although a short-term price correction is possible after the rapid rise, it would be beneficial to increase interest in the secondary battery industry due to momentum from the expansion of EV battery volumes centered in Europe in the second half of the year and responses to new demand region expansions."

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