From KRW448tn to KRW341tn
KOSDAQ fell 3.6 percent to close at 769.92 points on June 20, which is the lowest since July 8, 2020. The index has dropped 25.54 percent since this year’s first trading session. The aggregate value of the market dropped from 448 trillion won to 341 trillion won in that period.
According to the Korea Exchange, this year, KOSDAQ showed a negative H1 growth for the first time in six years. “KOSDAQ fell 1 percent in the first half of 2016 but rose 6.3 percent, 10.1 percent, 2.2 percent, 2.5 percent and 5.9 percent in the same periods of 2021, 2020, 2019, 2018 and 2017, respectively,” it said.
This year’s contraction has to do with U.S. interest rate hikes and the resultant decrease in institutional investment. From June 1 to 20 this year, domestic and foreign institutional investors recorded a net selling of 1.6687 trillion won and 3.535 trillion won in KOSDAQ, respectively.
“Unlike KOSPI, KOSDAQ is home to multiple high-valuation stocks such as biotech, Internet, game and media, and these stocks are being affected relatively more by the current interest rate conditions,” Korea Investment & Securities said, adding, “In addition, biotech stocks have lost steam with COVID-19 subsiding.”