3 KOSDAQ Stocks Surge Over 50% as KOSPI Slumps, AI Stocks Sink
HLB, SPG, and Peptron have every surged greater than 50% over the previous month on the KOSDAQ, South Korea’s secondary inventory trade for small and mid-cap companies. The rally comes even as the KOSPI, Korea’s principal index, struggles to recuperate from a historic crash.
Regulators tightened guidelines on leveraged exchange-traded funds (ETFs) in late July, and a world AI-driven selloff hit chipmakers. Both forces pulled cash out of KOSPI heavyweights and into smaller KOSDAQ names.
KOSPI’s Rough Month
The KOSPI fell 22% in July, certainly one of its largest month-to-month drops on file, after tumbling as a lot as 34% from a July 22 file high earlier than a virtually 18% single-day rally on the ultimate buying and selling day lower the losses.
Regulators blamed single-stock leveraged ETFs monitoring Samsung Electronics and SK Hynix for the swings. They raised the minimum cash deposit for buying and selling these merchandise from 10 million received to 30 million received.
Trading within the affected ETFs has since collapsed by as a lot as 93%. However, the KOSDAQ small-cap rally adopted as an alternative of a calmer market. The KOSDAQ notched 5 straight gaining classes by way of August 6, even as the KOSPI stored swinging.
A separate AI-linked selloff has weighed on KOSPI heavyweights. On July 28, SK Hynix closed 14.65% decrease and Samsung Electronics dropped greater than 13% on fears that AI infrastructure spending was peaking. Micron’s 39% plunge added to the stress on Korean reminiscence makers.
Why the Three Stocks Are Rallying
HLB’s rally follows its most cancers drug rivoceranib. The Food and Drug Administration (FDA) rejected the drug for a 3rd time on July 13, citing manufacturing issues at a accomplice’s Chinese plant. Two days later, the FDA cleared that facility, sparking a single-day surge of practically 30%.
SPG, a motor and precision-reducer maker, is rallying on its push into humanoid robot actuators. IBK Securities has referred to as it the one Korean agency with a full lineup of humanoid-grade precision reducers. SPG already provides Rainbow Robotics and is in early talks with US companies.
Peptron (*3*) on August 3 on obesity-drug provide chain hypothesis. Investors wager Korean producers might deal with home manufacturing for Eli Lilly’s once-monthly GLP-1 remedy. No provide contract has been confirmed but.
Morgan Stanley’s KOSPI upgrade suggests some buyers see the crash as a shopping for alternative reasonably than an enduring setback. Whether the KOSDAQ’s rotation commerce holds could rely upon how rapidly the KOSPI stabilizes.
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