The global biotech investment landscape is sharply diverging between the United States and South Korea. While the U.S. biotech sector continues to soar, the domestic sector in South Korea is experiencing a downturn, leading to an unprecedented decoupling phenomenon.
According to the Korea Exchange, the domestic representative biotech exchange-traded funds (ETFs), 'TIGER Bio TOP10' and 'KODEX Bio,' have been unable to escape a downward trend.
The 'KODEX Bio' ETF, managed by Samsung Asset Management, closed at 8,705 won, down 355 won (3.92%) from the previous trading day. This marks a staggering 42.73% drop from the beginning of the year when it was priced at 12,425 won, falling below the 9,000 won mark. Other major domestic biotech products, including 'TIGER Bio TOP10' from Mirae Asset Management, have also faced declines in July, with the KRX K-AI Biotech KOSDAQ index dropping 10.30% and the KRX Bio TOP10 index falling 2.95% this month.
In contrast, the U.S. biotech ETF 'XBI (SPDR S&P Biotech ETF)' has been on a different trajectory, consistently reaching new 52-week highs. As of July 2, it closed at $160.46, a 32.04% increase from the start of the year when it was priced at $121.52, nearing its all-time high of $173.99 from February 8, 2021.
During the COVID-19 pandemic, both markets experienced synchronized surges followed by corrections during the interest rate hikes of 2022. However, this strong correlation began to break down at the start of this year. Amid expectations of global interest rate cuts, the U.S. XBI hit a low and began a rally, steadily surpassing previous highs. In contrast, the South Korean biotech sector saw only a temporary rebound, with a sharp rise in March followed by a downward trend.
Market experts attribute this divergence to a significant concentration of supply and demand in specific leading themes, such as semiconductors, which has eroded overall confidence in the KOSDAQ market, hindering the biotech sector's performance. An asset management official stated, 'The KOSDAQ market is currently under significant pressure due to various complex factors. For the KOSDAQ market to rebound, a recovery in the biotech sector is essential.'
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.