[Featured Stocks] Signs of COVID-19 Resurgence... Healthcare Stocks Rising Again

On the 6th, as new COVID-19 cases increased by more than 20% within a week, showing signs of a resurgence, citizens visiting the screening clinic set up at Seocho-gu Public Health Center in Seoul are waiting to get tested. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Ji Yeon-jin] As the number of COVID-19 confirmed cases shows an increasing trend again, the healthcare sector is recording an upward trend in the domestic stock market.

According to the Korea Exchange on the 6th, from the 28th of last month to the day before, the KTX300 Healthcare Index rose 2.64%, and the KTX Healthcare Index also increased by 2.24%, marking the largest gains. During the same period, in the KOSPI market, the KOSPI200 Healthcare Index recorded a high return of 3.90%, Pharmaceuticals 2.40%, and Medical Precision 5.41%. While most sectors showed weakness, with the KOSPI index falling 2.50% during this period, healthcare-related stocks posted solid returns.

The rise in COVID-19 confirmed cases appears to have pushed up the stock prices of the healthcare sector. According to the Central Disease Control Headquarters, the average daily number of confirmed cases last week was 8,549, and the number of confirmed cases on this day was about 19,000, marking the highest level in four weeks since the fourth week of May on a Wednesday basis.

COVID-19 is showing signs of resurgence globally as well. The French Ministry of Health announced on the 5th (local time) that 206,554 new COVID-19 positive cases were confirmed in the past 24 hours, the highest number of new cases in France in three months. On the 2nd (local time), The New York Times reported that the global average number of confirmed cases reached 765,700, an increase of 49.83% compared to 511,000 on June 18, two weeks earlier.

Because of this, investment sentiment in the domestic stock market has focused on bio companies engaged in developing COVID-19 vaccines or treatments. SK Bioscience surged 24.87% over the past week, the largest increase, followed by Aptabio (16.1%), Korea BNC (14.96%), Medyzion (14.75%), Cellivery (14.62%), MedPacto (12.35%), and Seegene (11.13%), all recording double-digit returns. Lee Ji-su, a researcher at Daol Investment & Securities, explained, “Recently, as the number of COVID-19 confirmed cases has been increasing worldwide, pharmaceutical stocks continue to show strength. In particular, stocks like SK Bioscience with low PER seem to have relatively larger rebounds.”

As of 9:40 a.m. on this day, while the KOSPI index was down more than 1%, Celltrion, which developed a COVID-19 treatment, rose more than 2%, and Celltrion Healthcare also recorded an increase of over 2%. Medyzion showed a strong rise of over 2%, and Seegene was slightly up by 0.77%. On the other hand, MedPacto and Aptabio fluctuated around the flat line, and SK Bioscience recorded a decline of more than 3%.