Korean Air Stock Returns to Pre-COVID Levels Driven by Foreign and Institutional Investors

[Asia Economy Reporter Song Hwajeong] Korean Air has recently continued its strong performance, recovering its stock price level to that before the outbreak of the novel coronavirus infection (COVID-19). Foreign investors and institutions have been leading the stock price recovery by net buying for consecutive days.

According to the Korea Exchange on the 11th, Korean Air closed at 28,300 KRW the previous day, marking the highest closing price this year. This is the first time this year that Korean Air's closing price has exceeded 28,000 KRW.

Korean Air's stock price has been rising continuously recently, showing a complete recovery from the COVID-19 shock. Compared to the yearly low recorded on March 19 (13,600 KRW) due to the COVID-19 shock, it has risen by 108.09%. It has increased by 10.98% just this month.

This strong performance has been driven by foreign investors and institutions. Foreigners and institutions have consecutively net bought Korean Air for six trading days.

Researcher Eom Kyunga from Shin Young Securities analyzed, "Korean Air will be the only airline to benefit in the process of absorbing suppressed demand after enduring the COVID-19 pandemic period well," adding, "It is possible to expand its international passenger market share due to the restructuring of foreign airlines, and there is also an expectation of value increase during the normalization process of the acquired company."

The recent stock price rise is interpreted as reflecting expectations for vaccine development and the acquisition of Asiana Airlines. Researcher Kim Yuhyuk from Hanwha Investment & Securities said, "It is estimated that about 8 billion doses will be transported through the air cargo market during the vaccine distribution process, which accounts for 3-6% of the annual cargo volume and is a scale sufficient to drive market conditions upward," adding, "Benefits will be concentrated on a very small number of airlines like Korean Air that operate cargo planes and have received the international standard certification (CEIV Pharma) proving expertise in pharmaceutical air transport, demonstrating a profit growth trend differentiated from other airlines."

However, there is also a view that caution is needed as the stock price has surged recently. Researcher Yang Jihwan from Daishin Securities pointed out, "The benefits of acquiring Asiana Airlines will vary depending on how quickly the COVID-19 situation calms down next year," and added, "It is necessary to be cautious about the short-term surge in stock prices due to vaccine development news and the Asiana Airlines acquisition news."

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