COVID-19 Theme Stocks 'Rollercoaster' Warning

Fear of Contagion Spurs Volatile Swings in Delivery, Convenience Food, and Online Education Theme Stocks

[Asia Economy Reporter Minwoo Lee] Stock prices of various theme stocks are fluctuating due to the spread of the novel coronavirus infection (COVID-19). As indoor activities increase out of fear of infection, the stock prices of companies in sectors such as delivery services, convenience foods, and online education have been soaring and plunging over several days, raising concerns about the need for cautious investment.

According to the Korea Exchange as of 11 a.m. on the 26th, Changhai Ethanol, which manufactures ethanol used as a disinfectant ingredient, is trading at 15,600 won, up about 8.8% from the previous day. Since the 22nd, it has surged daily by 29.85% and 28.45%, reaching an intraday three-year high of 22,900 won on the 24th. However, it then plummeted to around 14,000 won, about half the price, within two days before slightly rebounding. Mask manufacturer Monalisa is also experiencing sharp fluctuations. Since the 20th of last month, it has surged more than 20% six times. During this period, it also dropped nearly 20% four times. After recording 9,400 won on the 21st, it fluctuated between 6,700 and 7,000 won on the morning of this day.

The same applies to convenience food stocks. For Wooyang, which produces canned and instant foods, the price rose to the daily limit on the 24th, reaching a three-month high of 6,340 won. However, it plunged about 20% to the mid-4,000 won range in just one day. Seoul Food, a manufacturer of frozen dough used as a bread ingredient, has been soaring since the 21st. It recorded the daily upper limit price for two consecutive trading days, reaching an all-time high of 278 won.

Online education stocks such as NE Neungyule and Ice Cream Edu are also experiencing rapid ups and downs. As schools have been postponing their openings one after another due to the impact of COVID-19 infections, indoor education demand has increased, leading these stocks to be grouped as theme stocks. NE Neungyule, which was in the mid-3,000 won range on the 20th, surged to a 52-week high of 5,300 won within two trading days but dropped to the 3,200 won range in just one day. It then surged again by more than 15%, hovering around 3,900 won on the morning of this day. Ice Cream Edu showed a similar pattern, fluctuating between the daily upper and lower limits over three trading days.

Financial authorities are also on high alert amid this theme stock frenzy. The Korea Exchange has announced that it will closely monitor unfair trading activities appearing in the stock market due to the spread of COVID-19. A financial investment industry official pointed out, "The stock price increases due to the spread of COVID-19 may not have a logical causal relationship with performance improvements," adding, "Investing based on vague expectations is very risky."

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