[Edaily Reporter kyoungeun kim ] As the biotech and healthcare sectors—key segments of the KOSDAQ market—continue to underperform, the KOSDAQ index remains stuck in a prolonged slump. Amid this situation, expectations for a turnaround are growing as the healthcare sector draws attention as the next investment target for the National Growth Fund.

According to MP Doctor, the KOSDAQ Index closed at 920.57 points on the 29th, surging 69.20 points (8.13%) from the previous trading day. While the KOSPI Index closed slightly flat, institutional investors drove the KOSDAQ Index higher with net purchases totaling 5039억 won.

The main reason for the rally is believed to be the rotation of funds into biotech and battery stocks, which had been sidelined as the market’s focus on semiconductors began to ease. The National Growth Fund’s decision to invest in LigaChem Biosciences stimulated buying sentiment in biotech stocks, while secondary battery stocks also rebounded strongly as they filled a supply gap. A buy-side circuit breaker was even triggered during the trading session.

However, the KOSDAQ index has actually declined over the 30 years since its launch at 1,000 points, a performance that contrasts sharply with the U.S. Nasdaq—which is dominated by tech stocks—and surged 23-fold (approximately 2,200%) over the same period.

The weak performance of biotech stocks, which dominate the top ranks by market capitalization, is cited as the key cause of this slump. As of the 26th, the KOSDAQ 150 Healthcare Index had fallen 24.11% from the start of the year. Consequently, the share of biotech stocks (medical precision equipment and pharmaceuticals) in the KOSDAQ’s total market capitalization fell from 21.9% at the end of last year to 18.4%.

Analysts attribute this to a combination of factors, including a lack of follow-on investment after listings under the technology exemption and the inherent nature of the biotech sector, where short-term returns are difficult to achieve. Structural issues, such as a failure to manage stock prices post-listing—including a decline in capital raised due to distrust in the KOSDAQ market—are also cited.

With the performance of pharmaceutical and biotech stocks thus determining the success or failure of the KOSDAQ market, all eyes are on whether the National Growth Fund can provide a turning point.

In a report released today, MIRAE ASSET SECURITIES noted, “In the first half of this year, the KOSDAQ market underperformed significantly compared to the KOSPI, and the healthcare sector, in particular, faced an especially difficult period as the global interest rate environment coincided with a concentration of capital in the tech sector.” It further noted, “Although corporate fundamentals have not deteriorated, persistent structural exclusion from capital flows has led to a surge in companies trading at historically low valuations.”

Kim Chung-hyun, an analyst at MIRAE ASSET SECURITIES, said, “The execution of investments by the National Growth Fund could serve as an opportunity to boost investor interest and refocus attention on corporate fundamentals.”

Given that Track A investments for the second phase of the National Growth Fund’s mega-project were executed in the biotech and vaccine sectors, it is highly likely that the next round of investments will target the medical device sector. He recommended focusing on KOSDAQ-listed companies with global competitiveness and those selected for projects under the Inter-ministerial Medical Device R&D Consortium. In the medical device sector, #NEXTBIOMEDICAL CO., LTD. ( SEERS TECHNOLOGY(458870)) and #Curiosis Inc. ( i-SENS, Inc.(099190)) were highlighted; for new drug development companies, Alteogen Inc.(196170), ABL Bio Inc.(298380), and #Orum Therapeutics, Inc. were recommended; and in the Contract Development and Manufacturing Organization (CDMO) sector, ST Pharm Co., Ltd.(237690)was identified as a stock to watch.