The Presidential Race Kicks Off: "Lee Jae-myung and Yoon Seok-youl Busy Searching for Beneficiaries of Their Campaign Promises"… Intersection 'Construction'

[Asia Economy Reporter Lee Seon-ae] As the presidential race between ruling party candidate Lee Jae-myung and opposition candidate Yoon Seok-youl officially begins, the stock market is busy searching for beneficiary scenarios from the candidates' campaign pledges. The pledges of the two candidates, who have just become the final nominees of their respective parties, are not yet finalized. It is expected that economic policies and stock market-related pledges will be further detailed during the main election campaign. From the current perspective, the securities industry views the common beneficiary sector of both candidates' policies as 'construction.'

According to the financial investment industry on the 10th, Lee Jae-myung's pledges are likely to benefit eco-friendly and domestic demand stocks, while Yoon Seok-youl's pledges are expected to favor export stocks. Both candidates' policies are favorable to the construction sector.

In Lee Jae-myung's pledges, attention should be paid to the funding of the basic income policy. To secure this funding, he plans to introduce a land holding tax and a carbon tax, which will inevitably impact companies with high carbon emissions. Based on 2020 data, the top carbon emitters are steel, petrochemicals, cement, refining, and semiconductors.

Kim Seong-geun, a researcher at Korea Investment & Securities, explained, "Since high-carbon industries lead exports, Lee Jae-myung's election could create a more favorable environment for domestic demand stocks rather than export stocks," adding, "If the proposed carbon tax plan is implemented as suggested, the burden on companies is expected to be significant." However, this is positive news for eco-friendly companies, especially those with technologies that reduce carbon emissions, which are likely to attract attention.

Yoon Seok-youl has not presented clear environmental pledges. He envisions a private sector-led economy rather than a state-led one. His goal is to create quality jobs led by the private sector, ease burdens on companies, and abolish about 80 major regulations that restrict corporate activities. From a diplomatic perspective, he aims to maintain closer ties with the United States than the current administration and facilitate participation in the U.S.-led supply chain restructuring. He is also considering gradual membership in the 'Quad,' which the current government has been hesitant about. Considering this, a more favorable environment for export stocks rather than domestic demand stocks may tentatively develop.

Researcher Kim said, "Lee Jae-myung has presented specific stock market-friendly pledges such as pursuing inclusion in the Morgan Stanley Capital International (MSCI) developed markets index and considering benefits for long-term investors, but the burden on top market capitalization companies to secure funding for various redistribution pledges could be greater than expected," adding, "On the other hand, Yoon Seok-youl may find it difficult to immediately implement fiscal policies, but his regulatory easing stance is expected to have a positive effect."

Although the approaches differ, both ruling and opposition candidates emphasize expanding housing supply, creating strong expectations for benefits in the construction sector. The difference lies in Lee Jae-myung focusing on expanding public housing, while Yoon Seok-youl plans to revitalize private redevelopment and reconstruction. Jo Young-hwan, a researcher at Kiwoom Securities, said, "It is a positive factor that both candidates emphasize supply expansion," and predicted, "Although short-term market instability is expected ahead of the election, once election issues are resolved, construction stocks will continue their existing upward trend regardless of the outcome."

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