A petrol attendant stands next to a newspaper headline in Pretoria, South Africa, Saturday. AP-Yonhap
By Kim Yoo-chul
The South Korean stock market is awaiting updates over the Omicron variant of the coronavirus. As the local stock market very closely correlates with moves in major indexes, thoughts are investors will react negatively following last week’s fall in U.S. and European stock markets.
Crude oil prices and Treasury yields plunged on Wall Street as a new strain ― known as the Omicron variant ― prompted fears of renewed social restrictions. As the market slides, investors are being advised to move their money into stocks of companies related to vaccine production, work-from-home, food delivery and games, analysts said, Sunday.
Last week on Wall Street, Pfizer partner BoiNTech and Moderna made gains on the back of the Omicron variant. Moderna said it is testing to see if a higher booster dose of its vaccine would provide protection against the new virus strain.
In sync with advances of COVID-19 vaccine producing companies, Samsung Biologics and Seegene are expected to be visible gainers until any scientific findings are found in terms of effectiveness of existing COVID-19 vaccines in defending against the Omicron variant.
A departure billboard displays flights to Lisbon, Cape Town, Zurich and Frankfurt at the airport in Munich, Germany, Saturday. EPA-Yonhap
Pfizer and Moderna said they were working on the development of Omicron COVID-19 variant vaccines, though FDA approval will take several months. Samsung Biologics is Moderna’s CDMO partner under which the Samsung affiliate manufacturers the latter’s COVID-19 vaccines at its Incheon Songdo plant with substances and core materials provided by the U.S.-based biotechnology firm.
Last week, COVID test-kit leader Seegene spiked 17.1 percent to end at 71,900 won with Labgenomics soaring 24.6 percent to 31,400 won per share. SK Bioscience, a local COVID-19 vaccine developer and one of the country’s leading CDMO companies, saw 9.41 percent rise at 279,000 won, according to data by Korea Exchange (KRX), the country’s top bourse operator.
The so-called “lockdown beneficiaries,” COVID-19 testing and vaccine treatment companies had been gaining. But their growth momentum is recently questioned mostly because of massive vaccination efforts by the South Korean government.
“News of the Omicron COVID-19 variant is just a bad factor in terms of investment sentiment as supply chain troubles have been continuing. But the market is awaiting for developments of factory closure. As no such announcements have yet to be made, I would say market volatility would be limited. Again, we have to find out if this new variant will cause more lockdown and even more economic depression around the world. Before that, investors are advised to assess stocks based on short-term trading view,” said Seo Sang-young, an analyst at MiraeAsset Investment.
Other than “sentimental factors,” some analysts said “blind investment” in the stocks of local vaccine makers won’t pay off as the country’s major biopharmaceutical firms are in boxed progress as they responding to only manufacturing COVID-19 vaccines.Internet Explorer Channel Network