Pharma shares’ market cap exceeds 20% in Kosdaq market

2017.11.22 15:33:17 | 2017.11.22 15:33:39
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South Korean pharmaceutical and biotech firms’ stocks are raging, helping to fuel the country’s secondary Kosdaq bourse as their combined market capitalization exceed 20 percent in the market.

According to the country’s securities market operator Korea Exchange on Wednesday, the combined market value of 73 shares of Kosdaq-listed pharmaceutical and biotech companies recorded 59.2 trillion won ($54.2 billion) as of Monday, accounting for 21.49 percent of the secondary stock market’s total valuation of 275.5 trillion won.

The pharma and biotech shares’ overall market value made up 17.26 percent of Kosdaq’s total market cap as of Dec. 31, 2016, and had hovered around 18 percent in the first half of this year. But the stocks have recently gained strong momentum amid the government’s ongoing drive to foster the growth of the pharmaceutical and biotech sector. Their combined share in the market has jumped from 18.23 percent on Sep 30 to 19.28 percent on Oct 31, then to 20.23 percent on Nov. 6, breaking the 20-percent mark for the first time. It hit a historic high of 21.75 percent on Nov. 16 and has remained around 21 percent until today.

In the Kosdaq market, often dubbed as the Korea’s Nasdaq crowded with tech stocks, pharma shares represented a mere 7.94 percent of the market’s total market cap as of Dec. 31, 2010 when semiconductor shares accounted for the largest 12.63 percent followed by IT shares with 11.20 percent. But as of Nov. 20, 2017, pharma shares’ market cap is the largest 21.49 percent, followed by semiconductor shares with 9.83 percent and IT shares with 6.88 percent.

During the cited period, the number of pharma shares listed on the Kosdaq bourse has added 26 to 73 while semiconductor companies’ stocks have increased 31 to 115. But IT stocks has lost 3 to 108.

Pharma sector’s sharp gain in market value was largely due to recent jumps in share prices of heavyweight biopharma and biotech companies such as Celltrion Inc., SillaJen Inc. and Tissuegene, Inc. Among them, Celltrion, No. 1 stock on the Kosdaq market in terms of market cap, recently decided to move to the country’s bigger bourse Kospi early next year at the earliest.

Shares of Celltrion finished Tuesday at 223,600 won, up from 175,000 won on Nov. 6. SillaJen stocks jumped to 126,000 won from 80,600 won during the same period and shares of Tissuegene, which debuted on Kosdaq on Nov 6, finished Tuesday at 65,100 won, recording a steep jump from its IPO price of 27,000 won.

Market experts predict pharma and biotech shares would continue rally in the Kosdaq market thanks to government’s strong support for the sector, but some others argue that these stocks have overshot asking to refrain from any aggressive betting on them for now.

By Shin Heon-cheol and Cho Jeehyun

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

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