Beneficiaries of Bidenomics... Foreigners and Institutions Are Already Investing

[Asia Economy Reporter Lee Seon-ae] As U.S. President Joe Biden considers and pushes for increases in corporate tax, income tax, and capital gains tax, it is expected to have a significant impact on the domestic stock market. Fundamentally, tax hikes are negative factors for stocks, which are classified as risky assets, but since an era of unavoidable tax increases has arrived, investment strategies should be sought in the ‘Bidenomics (Biden's economic policy) beneficiary stocks.’

According to the financial investment industry on the 26th, the green energy sector is typically cited as a beneficiary industry of the Biden administration’s tax increase plan. KB Securities researcher Lee Eun-taek advised, "As neoliberalism comes to an end and the era of tax increases begins, we must choose to enjoy it, and if the government collects more taxes, money will definitely be given somewhere," adding, "We need to find beneficiary industries."

He pointed to green energy and service consumption-related industries such as media and education as representative beneficiary sectors. This is because the Biden administration plans to invest in green mobility (infrastructure stimulus measures) through corporate and income tax increases. Earlier, the Biden administration announced that half of the $2.2 trillion infrastructure investment would be allocated to green energy projects.

Through the capital gains tax increase, taxes are expected to be used for vacation support, education, and childcare (U.S. Family Planning Act), so the securities industry generally views that service industries such as media, leisure, and education also deserve attention.

What is noteworthy is that foreigners and institutions have already been adding green energy and service industry stocks such as electric vehicles and secondary batteries to their portfolios. According to the Korea Exchange, institutions have been the largest net buyers of EcoPro BM in the KOSDAQ market from the beginning of this month through the 23rd, purchasing 54.7 billion KRW worth. They also net bought 51.5 billion KRW, 33.7 billion KRW, and 33.5 billion KRW worth of L&F, Dongwha Enterprise, and Cheonbo, respectively. Foreigners ranked EcoPro BM as the second-largest net purchase in the KOSDAQ market during this period, with net purchases totaling 28.3 billion KRW. Additionally, media content stocks like Studio Dragon were also bought simultaneously. Studio Dragon ranked 9th in institutional net purchases (24.8 billion KRW) and 7th in foreign net purchases (14.8 billion KRW) in the KOSDAQ market.

The recent climate summit chaired by President Biden, attended by leaders from 40 countries, is also positive news for the green energy sector. South Korea, the U.S., Japan, and others have raised their greenhouse gas emission reduction targets. NH Investment & Securities researcher Kim Young-hwan said, "The climate summit marks the first start of this year’s international climate change diplomacy," adding, "The upward revision of greenhouse gas emission reduction targets by major global countries is expected to act as a positive policy momentum for green sectors such as electric vehicles, secondary batteries, and renewable energy."

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