The KOSPI has extended its rally with consecutive record highs, but the KOSDAQ has been moving sideways around the 1,200 level, deepening investor disappointment. Unlike the KOSPI, which is backed by corporate earnings, the KOSDAQ has lost upward momentum as its leading biotech sector struggles and institutional fund inflows remain limited, analysts say.
According to the Korea Exchange on Thursday, the KOSDAQ closed at 1,210.17, down 3.57 points, or 0.29%, from the previous session. The index declined even as the KOSPI surged by 447.57 points. The KOSDAQ has risen 30.76% so far this year, less than half the KOSPI's 75.23% gain. Foreign investors net sold 61.6 billion won worth of shares, while institutions posted net selling for a fifth straight session at 544.4 billion won, pulling the index lower.
The KOSDAQ's weakness stems from the drag of the biotech sector, which accounts for the largest share of market capitalization. Secondary battery stocks performed well on energy storage system (ESS) momentum, but investor sentiment toward biotech shares — which have strong growth-stock characteristics — cooled rapidly amid weakening expectations for rate cuts and a series of controversies over technology licensing deals. On Thursday, Ecopro BM (247540) rose 6.03% and Ecopro (086520) gained 4.49%, but biotech stocks including Alteogen (196170) (-2.55%), Chong Kun Dang Pharmaceutical (000250) (-0.85%), Kolon TissueGene (950160) (-1.15%), and ABL Bio (298380) (-3.70%) fell across the board. The performance prompted investors to lament, "This is why the KOSDAQ doesn't work."
As a result, fund flows into KOSDAQ active exchange-traded funds (ETFs) have also stalled. From November 1 to December 4, the net asset value of the KoAct KOSDAQ Active ETF rose just 2.78%, from 899.8 billion won to 924.8 billion won. Over the same period, the net asset value of the TIME KOSDAQ Active ETF increased 3.36%, from 487.5 billion won to 503.9 billion won.
The government's push for a "many births, many deaths" structure — combining swift delisting of underperforming firms with expanded listings of innovative companies — is being cited as a medium- to long-term catalyst for the KOSDAQ. "If the KOSDAQ venture fund, business development companies (BDCs), and expanded pension fund allocations to the KOSDAQ are pursued in tandem, the effect of new capital inflows will grow," said Kim Dae-jun, an analyst at Korea Investment & Securities. "Adjusting just 5% of major pension funds' domestic stock investments could channel around 16 trillion won into the KOSDAQ."
