'In the Midst of the "Panic Stock Market"... Soaring Thematic Stocks'

KOSPI Down 10%, KOSDAQ Down 17% Over 2 Weeks
'Monkeypox' MikobioMed Soars 71%, Food Stock Hyundai Feed Rises Over 40%
Experts Say "Short-Term Gains Sought Over Earnings Improvement... Cautious Approach Advised"

[Asia Economy Reporter Lee Myunghwan] Amid concerns over inflation and recession triggering a bear market, South Korea's major stock indices have fallen more than 10% over two weeks. In the ongoing downtrend, 92% of all listed companies showed a 'blue light' indicating a price drop. Despite this, some thematic stocks saw double-digit gains due to short-term profit-seeking demand. However, experts advise cautious investment rather than speculative trading.

On the 24th, Asia Economy analyzed the stock price trends of domestic market indices and stocks from the 13th to the 23rd. The KOSPI fell 10.85%. The index, which was at 2595.87 on the 13th, retreated to 2314.32 on the 23rd, threatening the 2300 level. The KOSDAQ index's decline was even steeper. During the same period, the KOSDAQ index plunged 17.87% from 869.86 to 714.38. Sector indices in each market also declined across the board, with the largest drops in KOSPI sectors such as Paper & Wood (-21.68%) and Construction (-18.95%), and in KOSDAQ sectors like Digital Content (-25.08%) and Publishing & Media Replication (-25.00%). The 13th marked the day when the U.S. Consumer Price Index (CPI) showed a higher-than-expected increase, highlighting recession concerns and triggering a broad decline in major global stock markets.

Looking at individual stocks, the bear market trend was evident without exception. Among 2,622 listed companies on the domestic stock markets (KOSPI, KOSDAQ, KONEX), 2,412 stocks declined, accounting for 91.99% of all listed companies. Breaking it down by market, 96.39% of stocks listed on the KOSPI market and 91.39% of KOSDAQ-listed stocks experienced price drops.

Despite the severe downturn, 98 stocks, representing 3.74% of all listed companies, posted gains. However, most of these rising stocks were so-called 'thematic stocks' with high volatility influenced more by short-term issues than corporate value. MikobioMed led the gains with a 71.96% increase, rising from 10,700 KRW to 18,400 KRW during this period. MikobioMed, an in vitro diagnostic device company, is categorized as a monkeypox-themed stock. Shinsong Holdings (44.13%) and Hyundai Feed (43.99%) followed with gains in the 40% range. Due to the impact of the Ukraine war and soaring international grain prices, food-related stocks also showed high volatility. President Yoon Suk-yeol's announcement to revive nuclear power led to significant gains in nuclear power-related stocks such as G2 Power (42.74%) and Gangwon Energy (23.55%).

Many of the stocks that rose as thematic stocks saw strong buying interest from individual investors. During this period, individuals net purchased MikobioMed shares worth 2.876 billion KRW. This was in stark contrast to foreigners and institutions, who sold 1.837 billion KRW and 394 million KRW worth of the stock, respectively.

Experts warn that approaching thematic stocks for short-term capital gains can lead to losses. Hwang Sewoon, Senior Research Fellow at the Korea Capital Market Institute, said, "These stocks are likely to attract speculative trading demand aiming for short-term profits due to sharp price fluctuations rather than reasonable expectations of earnings improvement," adding, "If earnings do not support the price, it is quite common for stock prices to revert to their original levels, so a cautious approach is necessary."