Stocks rise and fall on news of deal’s start date
After March 15 was announced on Tuesday as the implementation date for the Korea-U.S. free trade agreement, investors came to yesterday’s trading session ready to bet on prospective winners from the long-stalled pact.
At the same time, they abandoned those expected to take a hit from the deal.
Auto parts manufacturers have been cited as some of the biggest beneficiaries of the trade pact, as tariffs on exports will be removed immediately after it takes effect.
But yesterday, leading auto parts makers with a substantial volume of U.S. exports, such as Mando and SL, saw slight gains, as early jumps were pared by investors locking in quick profits.
Similar movements of early gains adjusted by a selling streak could be seen at many larger textile manufacturers. The textiles sector also stands to benefit from the FTA as the U.S. is set to lower tariffs by an average of 13.1 percent on textile imports. Seongan and a number of other textiles makers saw their prices rise near the daily limit of 15 percent.
Stocks also skyrocketed among meat importers, with analysts attributing strong investor interest to the belief that imports of U.S. beef will increase after the FTA takes effect. Hanil Feed, which wholly owns meat importer K-Meat, also jumped by almost the daily limit.
Meanwhile, some major domestic pharmaceutical companies saw declines of up to 3.34 percent yesterday, as the trade pact heralds the arrival of stronger patent regulations to be implemented starting from 2015.
With generic drugs, or copies of patented drugs developed by multinational pharmaceutical companies, making up the chief revenue source for many domestic pharmaceutical companies, tougher regulations are expected to hit the sector hard.
Analysts said that many perceived pros and cons of the FTA had already been anticipated and factored into the market.
By Lee Jung-yoon [firstname.lastname@example.org]
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