Korea’s secondary Kosdaq market fails to get out a bearish run as major institutional players continue to dump their shares amid poor earnings outlook on its members and fallouts with major pharmaceutical and technology companies.

The leading Kosdaq index slid 1.19 percent to close at 640.17 on Tuesday, close to the Feb. 18 low.

Institutional players have led the selling spree, keeping up net sales position for 17 consecutive sessions, or the longest streak this year. During the 17 sessions, the benchmark index lost 7.2 percent.

Moreover, the index has little momentum to reverse its south-bound direction. According to market data provider FnGuide, securities companies have been adjusting down their fourth quarter and full-year earnings guidelines for 71 members.

The fourth-quarter operating profit guideline for Kosdaq companies was pared down by 6.26 percent from August estimate and 4.14 percent from September estimate. This year’s estimate was scaled down by 4 percent from August estimate.

The estimated operating profit of Celltrion Inc., the largest Kosdaq member by market capitalization, is 267.4 billion won ($235.7 million) for this year, down by 5.4 percent from 282.7 billion won estimated at the end of August. The corresponding figure for leading IT stock Kakao Corp. tumbled 12.6 percent in the same period.

Lackluster performance of bellwether stocks also added to the bearish note. (See the graph)

“Appetite for biotech and pharmaceutical firms, the main pillars of the Kosdaq market, soured after the scandalous disclosure flop with Hanmi Pharmaceutical Co. The discontinuation of the Galaxy Note 7 production worked negatively on the earnings of IT companies,” said Cho Ik-jae, the head of the research center at Hi Investment and Securities Co.

By Chae Jong-won and Jung Woo-sung

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