General Election Approaching in 3 Months... Political Theme Stocks Soar

Some Stocks Have More Than Doubled in Price Over the Past 3 Months

Prime Minister Lee Nak-yeon (right) shakes hands with Hwang Kyo-ahn, leader of the Liberty Korea Party, at the New Year's meeting of small and medium-sized business owners held on the 6th at the Korea Federation of SMEs in Yeouido, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kum Bo-ryeong] With about three months remaining until the 21st National Assembly election, some political theme stocks are soaring.

According to the Korea Exchange on the 14th, the closing price of Jooyeon Tech yesterday rose 5.37% (51 won) from the previous session to 1,000 won. SDN increased by 7.56% (215 won) to 3,060 won.

Jooyeon Tech and SDN are classified as related stocks of Prime Minister Lee Nak-yeon. Jooyeon Tech was grouped as a related stock of the Prime Minister due to news that Kwon Oh-ryong, an outside director of Jooyeon Tech who served as a vice minister during the Participatory Government, has a close relationship with the Prime Minister. SDN became a related stock because a company executive is an alumnus of Gwangju Jeil High School, the same school as the Prime Minister.

Yesterday, stocks related to the Prime Minister surged sharply after reports that he rented an apartment in Jongno-gu, Seoul, on a lease. This led to analyses that his candidacy for Jongno was almost certain. After setting the record as the longest-serving Prime Minister for 2 years and 8 months, he is expected to officially return to the party to run in the general election. Earlier this year, related stocks of Ahn Cheol-soo also surged when the former Bareunmirae Party lawmaker announced his return to politics.

Compared to three months ago, the prices of political theme stocks have risen more than double at their peak. Jooyeon Tech’s stock price rose 159.07% from 386 won on October 14 last year to 1,000 won yesterday. During the same period, SDN increased 84.34% from 1,660 won to 3,060 won. Ahn Cheol-soo-related stocks such as AhnLab and Sunny Electronics also rose from 62,000 won and 3,670 won to 77,400 won and 5,920 won, respectively. AhnLab was founded by former lawmaker Ahn, and Sunny Electronics was included in Ahn Cheol-soo theme stocks because a company executive is a former AhnLab employee.

However, many theme stocks are experiencing sharp fluctuations, increasing the risk of losses for investors. In response, Jung Ji-won, chairman of the Korea Exchange, stated at the '2020 Securities and Derivatives Market Opening Ceremony' held earlier this year, "We will focus on monitoring political theme stocks ahead of the general election and illegal short selling to minimize investor damage caused by unhealthy practices."

This content was produced with the assistance of AI translation services.