Kosdaq Surge Sparks Bubble Warnings
The junior Kosdaq index has surged to an all-time high of almost 800 points.
Powered by institutional and foreign buying on Thursday, the Kosdaq closed up 2.04 percent at 796.80, surpassing the 794.08-point record from November 2007.
The junior bourse had not attracted much attention so far this year due to the stellar performance of the Korea Composite Stock Price Index. But things changed last month with pharmaceutical and bio stocks on the Kosdaq soaring more than 20 percent.
But experts warn the surge could be short-lived. Lee Jong-woo at IBK Investment and Securities said, "The Kosdaq has reached a short-term high, but this has happened too quickly and there are signs of speculative buying."
The Financial Times on Wednesday warned the Kosdaq's surge has raised concerns of "excessive valuations" and compared the pharmaceutical and bio stocks rally to Korea's IT bubble back in the early 2000s.