Election Predictions, Already Familiar with Political Theme Stocks?

Political Theme Stocks, Recent One-Month Fluctuations
O Sehun Theme Stocks Surge, Ahn Cheol-soo and Park Young-sun Theme Stocks Weaken
"Poll Effects... Caution as Most Decline After Elections"

[Asia Economy Reporter Ji Yeon-jin] The election season is in full swing, and political theme stocks are rapidly emerging. With the Seoul mayoral by-election next month and the presidential election just over a year away, the stock market is already being shaken by the search for stocks linked to prominent politicians.

According to the Korea Exchange on the 24th, Jinyang Industry's stock price surged 125.12% from the 23rd of last month to the day before, ranking third in stock price fluctuation over the past month. During the same period, Jinyang Chemical also rose 50.27%. Jinyang has been identified as a related political theme stock as Vice Chairman Yang Jun-young of Jinyang Holdings is known to be an alumnus of Korea University along with Seoul mayoral candidate Oh Se-hoon. The stock price sharply increased from early this month when Oh defeated former candidate Na Kyung-won in the People Power Party primary.

On the other hand, theme stocks related to Ahn Cheol-soo, the People's Party candidate who conceded the Seoul mayoral candidacy the day before, have been on a downward trend over the past month. AhnLab, founded by candidate Ahn, saw its stock price drop 31.57% over the month, ranking 29th from the bottom in fluctuation rate. Camu E&C (-32.24%, 28th) and Sunny Electronics (-29.78%, 35th) also ranked within the bottom 50 in fluctuation rate. Camu E&C is linked as one of its outside directors served as the head of Ahn's support group, and Sunny Electronics is connected because one of its former executives is from AhnLab. Both stocks fell 15.37% and 20.07% respectively the day before, increasing their monthly decline.

JT, JCH Systems, and IMBC, grouped as theme stocks for Park Young-sun, the Democratic Party candidate for Seoul mayor, fell 13.79%, 8.32%, and 6.74% respectively over the past month. JRT is linked as Park and the company share alumni status from Sogang University, JCH Systems was considered a beneficiary due to Park's mention of Seoul-type virtual currency, and IMBC is an affiliate of Park's former workplace.

The stock price trends of these theme stocks are interpreted as reflecting public opinion poll results ahead of party primaries and candidate unification schedules. Park's camp has predicted in polls that the opposition unified candidate would win.

Meanwhile, the stock with the highest price increase on the exchange over the past month was NE Neungyul (203.05%). NE Neungyul's largest shareholder is reportedly from the Papyong Yun clan, the same clan as former Prosecutor General Yoon Seok-youl. The stock price surged whenever Yoon clashed with the ruling party over prosecutorial reform. Earlier this month, the company issued a public notice stating, "There is no relation between the company's past and present business and former Prosecutor General Yoon Seok-youl." Woongjin also surged 107.14% during the same period, as Chairman Yoon Seok-geum is known to be from the Papyong Yun clan.

Nam Gil-nam, Senior Research Fellow at the Korea Capital Market Institute, said, "Analyzing 70 political theme stocks during the 16th to 19th presidential elections shows that political theme stocks related to both losing and winning candidates experienced relative price declines immediately after election day," adding, "Individual investors need to pay particular attention to these stock price characteristics of political theme stocks."

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