Biden Beneficiary Stocks Surge... But Attention Needed on Long-Term Growth Stocks

Eco-friendly and Electric Vehicle Benefits May Be Short-term... Focus on Structural Long-term Growth Stocks

[Asia Economy Reporter Minwoo Lee] As Joe Biden, the Democratic candidate, is likely to win the U.S. presidential election, interest in 'Biden beneficiary stocks' is growing. According to his pledges, eco-friendly and electric vehicle-related sectors are expected to receive policy benefits, but these are seen as short-term gains. The biggest change following Biden's victory is the stabilization of government administration, which will reduce overall economic uncertainty, so attention should be paid to sectors capable of structural long-term growth.

According to the securities industry on the 6th, secondary battery and eco-friendly related stocks are considered the main beneficiaries of Biden's victory. This is because Biden pledged to replace all 3 million government-purchased vehicles annually with electric vehicles and achieve carbon neutrality by 2050. LG Chem, a representative secondary battery stock, closed up 4.15% the previous day and recorded 703,000 KRW, up 3.84% from the previous session as of 9:26 a.m. on the 6th. It is the first time in about two months since September 16 that LG Chem has surpassed 700,000 KRW. Samsung SDI and SK Innovation are also showing strong performance. Eco-friendly related stocks are also rising one after another. In particular, solar power specialist Hanwha Solutions and wind power-related stock CS Wind have gained momentum.

However, as President Donald Trump is likely to contest the election results through lawsuits, it is considered risky to approach some beneficiary sectors based solely on expectations. The important point is to focus on industries that can continue to develop regardless of who wins.

Representative sectors include not only eco-friendly industries such as renewable energy, energy storage, and conversion technologies but also semiconductors, 5G equipment, fintech (finance + technology), online consumption, subscription services, gaming, and software (SW). After the election situation ends, with expectations for the passage of economic stimulus measures and economic recovery due to the easing of COVID-19, traditional infrastructure-related stocks are also considered sectors to watch. This is because Biden is expected to be more proactive in fiscal spending and economic stimulus through infrastructure than Donald Trump.

Jinyoung Kim, a researcher at Kiwoom Securities, said, "Ahead of the presidential election, beneficiary stocks have shown differentiated movements based on anticipated results. Given that political uncertainty has not been resolved, it is reasonable to approach sectors capable of structural long-term growth rather than simply approaching some beneficiary sectors based on expectations."

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