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September 20, 2020

Game sector benefits most from launch of K-New Deal indexes

PUBLISHED : September 07, 2020 - 16:56

UPDATED : September 07, 2020 - 16:56

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In line with President Moon Jae-in administration’s “Korean New Deal” economic stimulus package, the nation’s sole bourse operator on Sept. 7 launched indexes that will be tracked by a 20 trillion won ($16.85 billion) “New Deal Fund.” On its first day, game indexes enjoyed a rally.

The Korea Exchange announced the five indexes that include secondary battery, bio, internet, game stocks, as well as a comprehensive index encompassing the four sectors under the KRX BBIG K-New Deal Index, composed of the four sectors with 3 stock items each. 

Finance Minister Hong Nam-ki briefs senior officials on details of the “Korean New Deal Fund” on Sept. 3. (Yonhap)



KRX BBIG K-New Deal Index began trading at 3,151.04, down 30.52 points, or 0.98 percent from the previous session. The index, however, fell slightly to 3,099.37, around 1:00 p.m.

Among the four sectoral indexes, the KRX Game K-New Deal Index showed the strongest performance. By starting at 1,387.28, rising 42.56 points, or 3.16 percent from the previous session, the index was trading at 1,353.83 in early afternoon.

10 stock items -- NCSoft, Netmarble, Pearl Abyss, Com2uS, NHN, DoubleU Games, Webzen, Neowiz Games, WeMade and Golfzon -- in the game index also started off strong.

While other sectoral indexes -- KRX Internet K-New Deal Index, KRX secondary battery K-New Deal Index and KRX Bio K-New Deal Index -- got off to a solid start, only the bio index continued to move upward to reach 3,488.41. Meanwhile, the secondary battery and game indexes fell by 1.97 percent and 1.92 percent to 3,915.15 and 2,720.43, respectively, in the given time.

Market watchers say that game sector has benefited the most since its market capitalization and trading volume are the smallest among the sectoral indexes.

As of Friday, the market value of 10 game stocks composed in KRX Game K-New Deal Index came to some 45.17 trillion won, about 2.32 percent of the totaled local stock market cap. The trading value also marked the smallest at 934.7 billion won.

“Amid smaller trading volume in the game sector compared to other sectors, it is likely to be impacted the most in supply and demand. With a similar amount of demand in the game sector, it will be impacted relatively positively,” said Lee Sang-min, an analyst at KakaoPay Securities.

While the KRX earlier said that it aims to launch the KRX BBIG exchange-traded fund next month, another market expert painted a rosy outlook for the game sector, as it is expected to further boost the related stocks.

Lee Eun-taek, an analyst at KB Securities said that with the launch of the ETF, passive funds may flow to the indexes-driven stocks, especially to the industry with the smallest market cap, the game sector.

By Jie Ye-eun  (yeeun@heraldcorp.com)

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