Increased Bangkok-jok Due to COVID-19... Game Stocks Enjoyed Reflex Benefits

On the 12th, a Dongjak-gu Office employee is instructing the PC room owner on how to use the COVID-19 self-disinfection device at the 'NCSoft Smart PC Room' nationwide first pilot PC room located in Noryangjin, Dongjak-gu, Seoul. Photo by Dongjak-gu Office.

[Asia Economy Reporter Park Jihwan] As the novel coronavirus infection (COVID-19) spread worldwide, the stock market in South Korea was utterly devastated in the two months following the first confirmed case on January 20.

Initially, the COVID-19 impact was concentrated on cosmetics, hotels, and leisure sectors, but as the pandemic escalated globally, all industries faced a severe stock price crash. Only the gaming and biotech stocks managed to hold up relatively well.

According to financial information firm FnGuide on the 22nd, the sector that experienced the largest market capitalization decline in the domestic stock market from January 20 to this month’s 19th was the mobile phone and related components sector. In this sector, 70 stocks lost a total market capitalization of 121 trillion 952 billion KRW over two months. Notably, Samsung Electronics alone saw a market cap decrease of 116 trillion 112.3 billion KRW.

During the same period, the semiconductor and related equipment sector, consisting of 115 stocks, lost 35 trillion 176.8 billion KRW in market capitalization. This was due to concerns over the rapid spread of COVID-19 in the US and Europe, which threatened demand for smartphones and semiconductors.

Additionally, as both demand and supply were hit simultaneously by the pandemic, the automobile sector’s six stocks saw their market cap plunge by 19 trillion 214.2 billion KRW in two months. Furthermore, the personal care products sector, mostly composed of cosmetics companies (48 stocks), lost 15 trillion 854.1 billion KRW in market capitalization.

The sectors with the smallest market cap decline were game software (-18.01%) and biotech (-18.14%). Except for these sectors, all other stocks saw their market caps shrink by more than 20% compared to two months ago.

In particular, as COVID-19 spread globally, attention has turned to gaming stocks. This is due to expectations that demand for games will increase as more people spend time indoors alone without contact with others.

The stock attracting the most interest is NCSoft. Its game 'Lineage 2M,' which launched at the end of November last year, continues to be a hit. Lineage 2M topped Google Play’s mobile game revenue chart within four days of release. The stock price trend is also positive. NCSoft’s closing price on the 20th was 567,000 KRW. Despite a recent drop of over 10% amid the COVID-19 shock, it has risen 4.8% compared to 541,000 KRW at the beginning of the year.

Researcher Ahn Jaemin of NH Investment & Securities analyzed, "Games typically have peak seasons when people spend more time at home, such as during school vacations. Gaming stocks can be seen as beneficiaries of COVID-19 and are expected to serve as defensive stocks."

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