Politically themed stocks show volatility as elections near
Stocks related to high-profile politicians are growing highly volatile as the April 10 general elections approach, prompting the country’s financial watchdog to closely monitor their transactions against possible price-rigging and other forms of market manipulation.
According to industry sources, a total of 40 listed stocks are categorized as being “politically themed” for their direct or indirect links to chiefs of rival parties — ruling People Power Party (PPP) interim leader Han Dong-hoon and main opposition Democratic Party of Korea (DPK) Chairman Lee Jae-myung — plus former Prime Minister Lee Nak-yon.
The data from Korea Exchange (KRX) showed the aggregate market value of the 40 stocks has increased by more than 50 percent since October 2023.
Some of them fluctuated erratically, hitting new highs and lows depending on incidents surrounding the aforementioned politicians.
Correspondingly, the 40 stocks on average lost as much as 9.8 percent per day while gaining up to 10.6 percent per day over the cited period.
Such a difference was more widely compared to the benchmark KOSPI that fell as much as 2.7 percent per day and rose up to 5.6 percent per day.
The stocks include Wider Planet, a big data-driven marketing company that is largely controlled by Lee Jung-jae, a popular actor who newly drew attention in November 2023 for having attended the same high school as Han.
Kosdaq-listed Wider Planet skyrocketed 30 percent, Dec. 20 as Han gained popularity as the interim leader of the ruling party.
But it also lost 11.6 percent, Jan. 22, when discord between President Yoon Suk Yeol and Han was said to be deepening over a scandal surrounding first lady Kim Kunhee who received an expensive Dior bag from a Korean American pastor.
The Han-Yoon rift settled thereafter, and Wider Planet has climbed to stay above 15,000 won for seven consecutive trading days through Wednesday.
Concerning main opposition leader Lee Jae-myung, three Kosdaq-listed companies — Dongshin Engineering & Construction, Atec and Ilsung Construction — had a bumpy ride last month when Lee was attacked by a knife-wielding assailant during his visit to Busan.
Dongshin Engineering & Construction is headquartered in Andong, Lee’s hometown in North Gyeongsang Province, where he has been addressing his kinship with the regional clan.
Based in Seongnam, Gyeonggi Province, Atec is led by a confidant of Lee from when Lee served as Seongnam mayor in the 2010s.
Ilsung Construction has been supportive of Lee’s housing policy since he was a presidential candidate in 2022.
Dongshin Engineering & Construction shot up 29.9 percent, while Atec advanced 17 percent and Ilsung Construction gained 7.42 percent when Lee was assaulted on Jan. 2. But they all retreated drastically afterward as Lee recovered and was discharged from hospital.
A former prime minister under the 2017-22 Moon Jae-in administration, Lee Nak-yon has announced his plans to launch a breakaway party after departing from the DPK.
The Lee-themed stocks include Bookook Steel, a benchmark KOSPI-listed steelmaker that stayed in the 4,000 won range in early and mid-January but slid to the mid3,000 won range afterward. Its CEO and Lee both graduated from Seoul National University.