South Korea’s secondary bourse Korea Securities Dealers Automated Quotations (Kosdaq) has remained bearish, a stark contrast to this year’s bull run of its American counterpart National Association of Securities Dealers Automated Quotations (Nasdaq). The lack of leading, blue-chip technology stocks in the Kosdaq market is mainly blamed for the underperformance of the Kosdaq against the Nasdaq that is full of global tech giants like Alphabet, Tesla, Facebook and more.

The Kosdaq closed down 0.97 percent or 6.6 from the previous trading to 672.49 on Wednesday. It has fallen 1.4 percent so far this year, while Nasdaq has gained 5.4 percent.

Although the Kosdaq started as a Korean version of the Nasdaq, it has failed to add innovative technology firms to the bourse. The Nasdaq lists the world’s most innovative technology companies such as Alphabet, Tesla, Facebook and Amazon that are touted as leaders of the so-called fourth industrial revolution, but the Kosdaq has none of them. “The Nasdaq market has been buoyed by the global tech giants that are considered to be leading the fourth industrial revolution,” said Cho Yong-joon from Hana Financial Investment Co.

Some argue that the two markets are totally different in nature, which makes any direct comparison impossible. What differentiates the Nasdaq from the New York Stock Exchange (NYSE) is the type of sectors or businesses of the listed companies, while Korea’s Kospi and Kosdaq are different in size of the companies. This is why Samsung Group’s biopharmaceutical unit Samsung Biologics Co. chose to go public on the Kospi market, not the Kosdaq.

Kim Hak-gyun, head analyst from Mirae Asset Daewoo Co., said the Kosdaq is better defined as a secondary market consisting of small- and mid-caps than as a tech-heavy market like the Nasdaq.

The bearish move of the Kosdaq has also coincided with the country’s largest institutional investor National Pension Service’s (NPS) investment decision early this year to increase allocations of index funds, such as the Kospi 200 and Kosdaq 150 indices, which are mainly composed of large-cap stocks. It ordered in June its fund managers to up index fund trading, and following suit, other institutional investors have been rushing to add more blue-chip stocks, such as those of Samsung Electronics, to their portfolios, shunning away from small- and mid-cap stocks that are not included in the major indices.

By Yong Hwan-jin and Park Yun-gu

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