KOSDAQ pharmaceutical industry index fell 10.5% in one month... Increasing alienation due to concentration of AI and semiconductor funds

(Seoul = Yonhap News) Reporter Kim Yu-ah = Last month, the KOSDAQ pharmaceutical industry index fell more than 10%, recording the largest drop among major industries.

Since the beginning of the year, it has fallen more than 30%, and the relative alienation of pharmaceutical and bio stocks is becoming more noticeable as stock market funds are concentrated in AI and semiconductor stocks.

According to Yonhap Infomax, a financial information service provider, on the 5th, the KOSDAQ pharmaceutical industry index fell 10.51% over the past month, showing the largest decline, beating general services (-8.08%), finance (-7.44%), and paper/wood (-5.01%).

In particular, it has fallen a whopping 36.65% since the beginning of the year, making it the industry with the 4th highest decline.

First of all, as stock market funds are focused on artificial intelligence (AI) and semiconductor stocks, the alienation of pharmaceutical and bio stocks has increased. In particular, even within the KOSDAQ, semiconductor small and medium-sized stocks emerged as leading stocks, and the machinery/equipment industry, which includes related stocks last month, rose 14% and electricity/electronics rose 10.28% during the same period.

In fact, the average daily trading volume on KOSDAQ last month was 7.0697 trillion won, which was 34% of the KOSPI.

The rising global interest rate trend is also a burden. Pharmaceutical and bio companies usually take a long time to visualize their performance, so when interest rates rise, the discount rate applied to future cash flows increases, which acts as a burden.

The Bank of Korea raised its benchmark interest rate by 0.25% last August, and while Japan and the United States also raised their benchmark interest rates, U.S. Treasury yields are rising sharply, spreading concerns throughout the market.

In addition, each company was hit with negative news related to clinical results and technology transfer contracts.

Orum Therapeutic [475830] terminated its technology transfer contract on the 18th with Bristol Myers Squibb (BMS) of the United States discontinuing the phase 1 clinical development of 'ORM-6151', a candidate for the treatment of acute myeloid leukemia, and will not receive additional milestones (stage-based technology fees).

It was also known that ABL Bio [298380] was subject to investigation, including search and seizure, on suspicion that its employees had made unfair profits by trading stocks using undisclosed information before announcing favorable news.

Last month, Orum Therapeutic fell 65.9% and ABL Bio fell 33.3%.

Some analysts say that with investment sentiment across the industry weakening, it will become important to determine the pros and cons of each stock.

Seon-ah Kim, a researcher at Hana Securities, mentioned that the introduction of the promotion system for KOSDAQ, which has many pharmaceutical stocks, was postponed to next year, and said, "There is a large gap between the stocks preferred by institutions and individuals, which leads to an unexplained market capitalization. We need to think more about the possibility and impact of implementing the promotion system, so for now, we should only focus on the fundamentals of each company."