The secondary KOSDAQ plunged to below the 700 mark in nearly one year due to a sharp drop of entertainment and bio stock prices. This is because confidence in the market has failed as even the US economy and stock market, which have led to boom in the global stock market, show signs of faltering and it has led to the selling spree of KOSDAQ stocks which are particularly packed with growth stocks with high valuation, according to market experts.
The tech-heavy KOSDAQ index closed at 699.30 on October 24, down 2.74 percent from a day earlier. It is the first time the KOSDAQ fell below the 700 mark since November last year. Institutions and individuals net bought 1.13 billion won (US$9.96 million) worth of shares but foreign investors net sold 51.8 billion won (US$45.68 million), pulling down the stock prices.
On the 24th, major bio stocks all showed a fall in share prices. The stock price of Nature Cell Co. and Celltrion Healthcare Co. dropped 12.1 percent and 6.99 percent, respectively, while that of Celltrion Pharm Inc. and SillaJen Inc. decreased 5.75 percent and 4.66 percent. The KOSDAQ Pharma Index fell 22 percent this month, recording the highest monthly drop this year.
The stock price of entertainment behemoths – JYP Entertainment Corp., SM Entertainment Co. and YG Entertainment Inc. – also took a nosedive due to concerns over worsening performance in the third quarter. The collapse of entertainment share prices is exceptional considering the fact that the stock price has been stable so far and there are high expectations for the entertainment industry.
There are no expectations in the market for a rebound in the KOSDAQ as there are no favorable factors that can drive a rally amid the current downswing in stock prices worldwide.