Value context and insight. lkm@koreatimes.co.kr
Korean investors turn bullish for China’s pharma, bio, EV industries
Dealers work the trading floor of a Hana Bank branch in Seoul, Oct. 26. Yonhap
By Lee Kyung-min
Local investors net bought 28 billion won ($21.5 million) worth of Chinese pharmaceutical, biotechnology and electric vehicle (EV) shares this month, extending a net purchase of what they judge are undervalued, high-growth players, according to market watchers, Friday.
A rapid recovery in investor sentiment is propelling the move, buoyed by the Chinese government’s economic stimulus policy. Also at play is increasing optimism of improved Beijing-Washington ties following the U.S.-China summit at the APEC gathering in San Francisco, Nov. 15 (local time). China’s Shanghai Stock Exchange Composite Index in turn ended at 3,072.83, gaining 2 percent from the end-October figure of 3,018.77.
Korea Securities Depository data showed local investors net bought 35.1 billion won in Chinese stocks from Nov.1 to Nov. 15. The figure is a rapid increase from a net purchase of 200 million won last month, a shift from net sell-off of a combined 107.5 billion won between June and September.
The significance of the net purchase was highlighted by the net sell-off of over 4.4 trillion won worth of local stocks this month.
Most of the 35.1 billion won, or 26.8 billion won, in net purchases involved WuXi AppTec, a Shanghai-headquartered global pharmaceutical, biopharmaceutical and medical device manufacturer.
Among the top 15 Korean-invested Chinese companies, six were EV-related businesses, including BYD, an EV and EV battery manufacturer. Others included retailers, consumer goods manufacturers and service providers.
WuXi AppTec surged 37.7 percent between July 1 and Nov. 15. BYD’s third-quarter, record-high sales outpaced Tesla's figure in the first nine months of this year.
Samsung Securities researcher Jun Jong-kyu said biotechnology, pharmaceutical and semiconductor shares are grouped as the new-growth market players in the fourth quarter.
“I recommend investors to increase holdings of the aforementioned shares and maintain conservative management of their investment portfolios,” he said.