Comment from Chinese official spurs stock gains
When Moon asked that China end what was seen as an economic retaliation against Korea for installing a U.S. antimissile system, Yang said that there would be “tangible results in the future.”
Stocks for travel agencies, duty-free operators and more sectors related to tourism from China jumped on Monday. The biggest increases came from the duty-free industry: Hanwha Galleria (17.26 percent), Shinsegae (7.27 percent), Lotte Shopping (6.61 percent) and Hotel Shilla (6.36 percent) all enjoyed jumps. All the duty-free operators but Shinsegae enjoyed higher stock prices on Tuesday as well.
The country’s two biggest carriers, Korean Air and Asiana Airlines, saw closing prices rise for two straight days. On Tuesday, Korean Air’s stocks went up 4.66 percent to 35,950 - a big increase, compared to a week ago, when it was as low as 30,100 won ($28.60). Asiana Airlines rose 3.25 percent and 2.24 percent on Monday and Tuesday, reaching its highest closing price since March.
“[The Chinese] never officially acknowledged that they retaliated over the Terminal High Altitude Area Defense [antimissile system], so likewise, it’s hard to officially decide that it’s over, but we see the atmosphere anticipating the ease spreading,” said researcher Piao Renjin at NH Investment & Securities. “It seems likely that there will be more Chinese tourists coming to Korea who in the past couldn’t come due to the ban on low-cost group tours.”
Manufacturers of rice cookers, one of Chinese tourists’ favorite products, had a good few days as well. Couchen’s stock went up by a striking 13.7 percent on Monday, and Cuckoo Holdings jumped by 8.56 percent.
“There were price hikes for several China-related shares even before word from the Chinese official,” said strategist Lee Kyoung-min of Daishin Securities. “If the retaliations are eased, stock prices can go even higher.”
Signs of thawing relations between Korea and China are showing up across multiple fields. A report from the Ministry of Land, Infrastructure and Transport last month showed that the number of flights planned between the two countries for the summer season (between late March and late October) is up by 15 percent compared to the winter season, which recently ended.
China’s largest online travel agency, Ctrip, added Korea to its list of possible destinations in mid-March for the first time in a year. The state-owned media outlet Xinjingbao published a detailed story on the JTBC television series “Misty” last month. Last year, Chinese media stopped their coverage of Korean pop culture, and Xinjiangbao’s story was the first time a state-run Chinese media published a story on a Korean drama since last March.
Five Korean movies, including “The Battleship Island,” a recent hit, were invited to the Beijing International Film Festival, which will take place this month.
Last year, no Korean films were invited to the festival. Tencent, a Chinese IT and entertainment giant, also recently purchased rights for Mnet’s singing competition show “Produce 101” and is preparing to launch a Chinese version this month.
Entertainment companies also received a boost from Friday’s news. Shares of YG Entertainment, JYP Entertainment and SM Entertainment rose on Monday and Tuesday.
The yuan has also been rising in value recently, increasing the purchasing power of Chinese consumers.
BY LEE HYUN, SONG KYOUNG-SON [firstname.lastname@example.org]
with the Korea JoongAng Daily
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