Three Pillars of KOSDAQ Suffer Sharp Drop
The top 20 companies in the secondary KOSDAQ market have lost nearly 12 trillion won (US$10.24 billion) in market value so far this year. This is because most of the biotech, media and entertainment stocks, which rank among the top in terms of market cap and are the three pillars of the KOSDAQ market, saw their prices plunge.
The combined market cap of the top 20 companies listed on the KOSDAQ decreased 12 trillion won (US$10.24 billion), or 22.27 percent, from 55.08 trillion won (US$47.02 billion) at the end of last year to 42.81 trillion won (US$36.55 billion) on July 5 based on the closing price, according to data from Korea Exchange (KRX) on July 7. Only four companies saw an increase in market value among the top 20. In particular, these shares were mostly purchased by retail investors. It means that retail investors have made a huge loss considering the fact that the KOSDAQ index rose 4.26 percent over the same period.
The price of bio shares plunged, leading to a sharp drop in market cap in the KOSDAQ. Kolon TissueGene Inc., which has had trading suspension since May 28 due to Kolon’s “Invossa fiasco,” lost a whopping 81.4 percent of its market cap. The stock price plummeted from 43,150 won (US$36.74) at the end of last year to 8,010 won (US$6.82) before the trading suspension. HLB Co. saw its market cap decrease 53.3 percent, SillaJen Inc. 31.97 percent and Helixmith Co. 26.57 percent, respectively. As a result, the share price of not only number one Celltrion Healthcare Co. but also HLB, Helixmith, MedyTox Inc. and Celltrion Pharm Inc. which is on the top 10 list in terms of market cap hit a fresh 52-week low after May. This was largely due to the prosecution's investigation into Samsung BioLogics Co, Invossa fiasco and failure in clinical trial of new medicines.
In addition, media and entertainment stocks showed a distinct stagnation. The stock price of media market bellwether CJ ENM Corp. and Studio Dragon Corp. has been continuously falling because of a box office failure of “Arthdal Chronicles” despite an investment of over 50 billion won (US$42.48 million). Entertainment companies also lost a considerable amount of market cap due to the Burning Sun scandal and the drug scandal. YG Entertainment Inc. saw its stock price drop 38.8 percent, SM Entertainment Co. 22.65 percent and JYP Entertainment Corp. 20.35 percent, respectively.
Given the current poor performance of market bellwethers, the KOSPI rose 3.37 percent after the end of May, while the KOSDAQ fell 0.33 percent.