Confirmed Cases Exceed 40,000 but Reopening Stocks 'Stir'

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Junho] Since the 8th, the government’s policy of not requiring self-quarantine for those who have dined with COVID-19 confirmed cases, except for unvaccinated cohabitants of infected individuals and close contacts in vulnerable facilities, has marked the beginning of a return to normalcy after the COVID-19 crisis. This has caused stocks in reopening (economic resumption) sectors to fluctuate. However, with daily confirmed cases exceeding 40,000 and a weekly average over 30,000, concerns about returning to normal life remain, placing investors at a crossroads.

According to the Korea Exchange on the 9th, the KRX Transportation Index rose 9.18% over six trading days from the 27th of last month to the 9th. This is the highest increase among individual indices within the KOSPI. On the previous day, transportation stocks such as Jeju Air (6.8%) and Jin Air (4.78%), as well as textile and apparel (1.3%), food and beverage (1.01%), and distribution sectors (0.98%) showed strength.

This change followed President Moon Jae-in’s statement at a COVID-19 meeting on the 7th, saying, "I believe this is the last hurdle toward recovery of daily life." Expectations have also risen as countries like the United States and the United Kingdom are considering endemic status (COVID-19 becoming endemic).

Lee Seonhwa, a researcher at KB Securities, commented on the casino industry, a major sector affected by COVID-19, stating, "From the second quarter of this year, air routes will open, and from the third quarter, casino visitors are expected to recover sharply." She added, "As reopening progresses worldwide, casino visitors will return to pre-pandemic levels."

However, this is not the first time expectations for reopening have risen. Especially with 40,944 new cases reported just the day before and a weekly average exceeding 30,000, there is no guarantee that government policies will remain unchanged.

Lee Woongchan, a researcher at Hi Investment & Securities, said, "Except for some airline stocks, the earnings of reopening stocks are poor and their financial conditions are weak, so their stock prices do not necessarily look cheap." He added, "The sustainability of the stock price increase may also not be high."

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