[MarketING] KOSDAQ Recovers to 830 Level on Foreign and Institutional Buying Pressure

KOSPI Closes Higher for 3rd Day
KOSDAQ Rises Over 2%, Recovers Above 830 Level

The KOSPI continued its upward trend for the third consecutive day. The KOSDAQ showed a strong gain of over 2%, recovering the 830 level. Both foreign investors and institutions drove the index higher by buying in tandem. In particular, the return of foreign investors to a buying stance in the KOSDAQ market after 10 trading days led to a significant rise.

KOSDAQ recovers 830 level with two consecutive days of gains... KOSPI strong for third day

On the 17th, the KOSPI closed at 2,494.66, up 14.42 points (0.58%) from the previous day. The KOSDAQ ended the session at 834.19, rising 17.44 points (2.14%).

[Image source=Yonhap News]

The inflow of buying from foreign investors and institutions supported the index rise. On that day, foreign investors and institutions net bought 156.9 billion KRW and 157.4 billion KRW respectively in the KOSPI market, and also purchased 229.6 billion KRW and 93.7 billion KRW respectively in the KOSDAQ market. Individual investors sold off 324.8 billion KRW and 316.7 billion KRW alone.

Kim Seok-hwan, a researcher at Mirae Asset Securities, explained, "Despite concerns over difficulties in the US debt ceiling negotiations and a slowdown in China's economic recovery, the inflow of buying from foreign investors and institutions expanded. In particular, the inflow of foreign buying focused on secondary batteries and biotech stocks led the KOSDAQ to rise more than 2%."

Foreign investors played a decisive role in the sharp rise of the KOSDAQ by turning to a buying stance in the KOSDAQ market after 10 trading days. It was the first time in about a month that foreign investors net bought more than 200 billion KRW in the KOSDAQ market. On that day, foreign investors purchased KOSDAQ stocks such as YG Entertainment (23.8 billion KRW), Sungwoo Hitech (21.1 billion KRW), and HLB (14.8 billion KRW). These stocks, which saw foreign buying inflows, also experienced significant price increases. HLB rose 14.12%, Sungwoo Hitech 12.17%, and YG Entertainment 7.41%. Choi Yoo-jun, a researcher at Shinhan Investment Corp., said, "Currently, the main driver of supply and demand can be seen as foreign investors. Since institutional buying power is limited and individual investor sentiment is somewhat subdued, it is highly likely that foreign investors will hold the lead in supply and demand."

Broad gains among top market cap stocks

The recovery of the 830 level was led by broad gains among the top market capitalization stocks in the KOSDAQ. Among the top 25 KOSDAQ companies by market cap, only two stocks saw price declines.

Biotech stocks showed overall strength on positive news such as new drug approval applications, while secondary battery stocks, which had been weak for some time, rose for the first time in a while. Entertainment stocks, which have been maintaining strength on the back of recent strong earnings, also contributed. The leading stocks EcoPro BM and EcoPro rose 1.31% and 3.09% respectively, while Celltrion Healthcare increased 2.08%, L&F 2.58%, and JYP Ent. 3.55%.

Among the top market cap stocks, HLB's strength stood out. HLB's stock surged on news that it had completed a new drug application for a targeted anticancer drug with the US Food and Drug Administration (FDA). On that day, HLB announced that it had completed the preparation process for the new drug application for 'Rivoceranib,' a targeted anticancer drug under development as a first-line treatment for liver cancer, and submitted the New Drug Application (NDA) to the FDA. This marks about 12 years since the first global clinical trial of Rivoceranib began in 2011. HLB explained that this is the first time a Korean biotech company has independently completed all clinical trials for its anticancer drug substance and is proceeding with the new drug approval process in the global market.

Researcher Kim said, "HLB led the overall sector's rise on news of completing the FDA new drug application for the targeted anticancer drug. Entertainment stocks also continued their strength, supported by earnings surprises from YG Entertainment and JYP Ent., and expectations for additional growth from the reopening of performances due to the reopening of economic activities."

YG Entertainment and JYP Ent. recently surged day after day, both hitting new 52-week highs on the day. JYP Ent.'s stock price touched 120,000 KRW intraday, and YG Entertainment reached 92,900 KRW, marking a 52-week high.

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