In the Upward Rally, Semiconductors, Batteries, and Dividend Stocks Played a Role... COVID-19 Treatment Expectations Also Contributed

On the 7th, KOSPI Index Hits Record High at 2745.44...Rising Except for Two Days Since the 23rd of Last Month

[Asia Economy Reporter Kum Boryeong] Since the KOSPI surpassed 2600 for the first time in history, it has been rapidly climbing and is now approaching the 2800 mark. During this ongoing rally, investors have been focusing their purchases on semiconductor and battery stocks, as well as bio, dividend, and earnings-related stocks.

According to the Korea Exchange on the 8th, the KOSPI index recorded an all-time high of 2745.44 the previous day. Since opening the 2600 era in the domestic stock market on the 23rd of last month, the KOSPI has set new highs on all but two trading days. Over 11 trading days, the KOSPI rose by 5.49%.

From the start of the rally on the 23rd of last month until the previous day, the top net purchase stock by foreign investors in the KOSPI market was LG Chem. Following were Celltrion, SK Hynix, SK Biopharm, and Hyundai Motor. During the same period, individual investors bought Samsung Electronics, Samsung Electronics Preferred, KT&G, Samsung Fire & Marine Insurance, and Daelim Industrial, while institutional investors purchased SK Innovation, SK, Hanmi Pharmaceutical, Hyundai Construction, and Mirae Asset Daewoo.

Investment in semiconductors and batteries was evenly distributed among different investor groups. In particular, Samsung Electronics and SK Hynix have attracted significant market attention amid forecasts of entering a DRAM boom period. Kiwoom Securities analyst Park Yooak stated, "Demand for PC and mobile DRAM in Q4 is exceeding market expectations, and DRAM spot prices have started to rise," adding, "DRAM contract prices are expected to begin increasing from Q1 next year, surpassing general market forecasts." However, Samsung Electronics did not rank among the top foreign net purchase stocks. This contrasts with the period from the 9th to the 20th of last month, when it was the top stock with purchases totaling 1.8027 trillion KRW over 10 trading days.

As the year-end approached, investors also showed interest in dividend and earnings stocks. KT&G and Samsung Fire & Marine Insurance are considered high dividend yield stocks. Mirae Asset Daewoo is expected to be the first in the securities industry this year to achieve a pre-tax profit of 1 trillion KRW.

Thanks to the KOSPI rally, the KOSDAQ has also maintained its upward trend. The KOSDAQ index, which was 873.29 on the 23rd of last month, rose to 926.88 the previous day, showing an upward trend except for two days. On that day, it briefly surpassed the 930 mark during the morning session.

In the KOSDAQ market, individual investors most actively purchased Celltrion Healthcare, Com2uS, Jeil Electric, ABKO, and ClinoMix. Foreign investors included Celltrion Healthcare, HL Biopharma, Seegene, Wonik IPS, and JYP Entertainment in their portfolios, while institutions invested in Genexine, Seegene, L&F, Seojin System, and Pearl Abyss.

The net purchases of Celltrion and Celltrion Healthcare were partly driven by expectations for the development of COVID-19 treatments. During this period, the stock prices of Celltrion and Celltrion Healthcare rose by 34.05% and 71.97%, respectively. After receiving approval from the Ministry of Food and Drug Safety for Phase 2 clinical trials of its COVID-19 antibody treatment, Celltrion recruited over 300 subjects and completed dosing by the 25th of last month. If the treatment is successful, Celltrion Healthcare is expected to handle overseas distribution.

Individual investors showed a 'love call' for IPO stocks. Jeil Electric was listed on the KOSDAQ on the 26th of last month, and ABKO on the 2nd of this month. Expectations for the lifting of China's ban on Korean games ('Hallyu ban') were reflected in stocks like Com2uS and Pearl Abyss. Com2uS succeeded in obtaining a game license from China on the 2nd, the first since the THAAD (Terminal High Altitude Area Defense) incident. JYP Entertainment is also considered a stock likely to benefit if the Chinese Hallyu ban is lifted.