Share prices mirror politics
Future planning and science minister nominee Kim Jeong-hun’s abrupt resignation has dragged down the stock prices of companies indirectly related to him.
Kim, a former president of Bell Labs and chief strategy officer of Alcatel-Lucent, withdrew yesterday after the main opposition Democratic United Party refused to discuss approval of President Park Geun-hye’s government reorganization bill with the ruling Saenuri Party.
Keystone Global shares tumbled 14.96 percent to close at 2,900 won ($2.65) yesterday. Company shares had risen the daily limit of 15 percent since Kim was nominated Feb. 17.
Keystone Global is seen by investors as a themed stock related to Kim as the company CEO is his brother-in-law.
Shares of Modacom dipped 12.05 percent and closed at 6,570 won. Market observers said Modacom, whose Chairman Lee Jong-hee previously worked at Bell Labs, specializes in hardware and software for mobile devices.
Shares of Daishin Information and Communications, a system integration affiliate of Daishin Securities, slipped 14.91 percent and ended at 970 won. Daishin was regarded as a themed stock of Kim after investors learned the company was recognized as a business partner of Alcatel-Lucent in 2005.
Meanwhile, stocks indirectly linked to Ahn Cheol-soo surged yesterday after it was revealed he will run for a National Assembly seat.
Ahn, a liberal who conceded his presidential candidacy to Moon Jae-in of the Democratic United Party last year, left for San Francisco on Dec. 19, saying that he will think about his next step.
“To realize new politics, Ahn has decided to run for a National Assembly seat [representing] Nowon C District in the April 24 by-election,” said Song Ho-chang, Ahn’s former campaign manager, on Sunday.
Shares of AhnLab, Korea’s largest anti-virus firm and founded by Ahn, jumped 14.94 percent and closed at 73,100.
Other tech firms listed on the main bourse also surged as their executives were known to have connections with Ahn. Shares of Komipharm International, for example, jumped 11.11 percent after Song Tae-jong, former CEO of Sunny Electronics, joined Komipharm as CEO. Song served as an executive at AhnLab, according to market observers.
Mirae Corporation also saw its shares reaching the daily limit. Jeong Moon-sool, the founder and former largest shareholder of the company, completely sold off his holdings in September. Jeong is known as Ahn’s mentor.
“Politically themed stocks tend to surge irrespective of their fundamentals and betting on these stocks is risky because they could pop at any time,” said an official at the Financial Supervisory Service. “Investors should base investment judgments on fundamentals and long-term growth of companies.”
By Kim Mi-ju [firstname.lastname@example.org]
More in Finance
[NEWS ANALYSIS] As foreigners rush back, market does an about-face
CU gets into the foreign exchange transaction business
Kospi hits another record high despite Covid spike
5-day winning streak ends as Kospi drops 0.62 percent
Debt is the latest hot product being pushed into the market