In January Next Year, KOSDAQ Effect... Impact of New Index Introduction & Major Bio Events

[Asia Economy Reporter Lee Seon-ae] The supply and demand environment for KOSDAQ is expected to be more favorable than KOSPI in January next year. The key supply and demand players supporting this are individual investors and pension funds. Individuals have consistently been net buyers in January over the past six years. Additionally, if a new KOSDAQ index is launched in January next year, pension fund capital is expected to flow in. The global bio conference is also an event that will bring a favorable supply and demand environment.

According to the financial investment industry on the 22nd, the KOSDAQ is expected to benefit from a bullish effect in January next year. Since 2015, individual investors have shown a consistent supply and demand pattern around the year-end major shareholder capital gains tax reference date over the past six years. From mid-December, selling pressure increases, with a sharp sell-off just before the tax reference date, but after the tax reference date, there is a rapid rebound buying. KB Securities researcher Ha In-hwan explained, "There is no reason for the supply and demand flow to change from the past, so a similar pattern is expected this year-end as well," adding, "The driving force raising expectations for KOSDAQ supply and demand at the beginning of the year is precisely the consistent investment pattern of individuals."

A new index is also expected to create supply and demand synergy. Although the announcement of a new KOSDAQ-related index has been delayed more than expected, it is likely to be announced by the end of December or in January. This stems from the government's aim to revitalize the KOSDAQ market. From the perspective of 'diversifying the domestic stock investment range,' the portfolio, which has been concentrated on KOSPI, will be diversified to resolve the neglect of KOSDAQ. The new KOSDAQ index plans to specially manage the top 5% of excellent companies listed on KOSDAQ. In terms of the number of companies, about 70 to 80 companies are expected to receive special management, which is anticipated to attract foreign and institutional investor funds. Researcher Ha emphasized, "Looking at past cases of new KOSDAQ-related index announcements, there is a high possibility that pension fund capital will flow in after the introduction of the new index."

Among KOSDAQ sectors, bio is considered a promising industry. First, the JP Morgan Healthcare Conference will be held on January 10 next year. It is the biggest event in the bio sector. It is a common feature that bio sector stock prices fluctuate ahead of this event every year. Over the past eight years, the KOSDAQ healthcare sector showed an upward trend until just before the JP Morgan conference. All subcategories within healthcare, such as pharmaceuticals, life sciences, and healthcare services, showed an upward curve. Even in 2016, 2018, and 2021, when bio sector stock prices were sluggish, the bio sector showed good stock price trends just before the JP Morgan conference, followed by differentiation by individual stocks. Next year's conference is expected to be attended by Samsung Biologics, SK Biopharm, LegoChem Biosciences, MedPacto, ABL Bio, NeoImmuneTech, Aptabio, and Olix.

Additionally, 'AI-based new drug development' is also a major momentum. On the 14th, the Ministry of Science and ICT announced an investment of 550 billion KRW in next year's life (bio) core technology development. The investment will be made in new drug fields (innovative new drug base technology, AI-based innovative new drug discovery), brain research (brain function regulation, electronic medicine), and response to new and mutant infectious diseases (next-generation vaccine basic core technology, vaccine hub infrastructure). Experts note that not only government policies but also corporate investments are continuously increasing in AI-related fields, which is noteworthy. Daewoong Pharmaceutical, Oncocross, SK Chemicals, Standigm, Syntekabio, JW Pharmaceutical, Simplex, Saltlux, Clinomics, and Dongkoo Bio & Pharma have announced their own AI business entries, joint ventures, acquisitions of other companies' shares, and MOUs this year.

Next year, besides the bullish effect in January, the overall neglect of KOSDAQ is expected to diminish. The expectation of good earnings from game, eco-friendly, and bio companies is a factor shifting the weight of KOSDAQ. Hana Financial Investment researcher Lee Kyung-soo said, "Recent adjustments in earnings estimates for next year suggest that the relative strength of mid-cap stocks and KOSDAQ will continue." Eugene Investment & Securities researcher Heo Jae-hwan also explained, "Because eco-friendly and game-related stocks have a large share in KOSDAQ, investors' interest is shifting to KOSDAQ."

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