Hinnamno 'Rally'... 3 Consecutive Days of Upper Limit Price

Typhoon 'Hinnamno' Moving North Causes Reconstruction Stocks Surge
"Beware of Riding Unfounded Stock Price Increases"

Due to the impact of Typhoon No. 11 'Hinnamnor', heavy rain fell on the 6th, and the area around Jamsugyo Bridge in Seoul is submerged in the flooded river./Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Hwang Junho] A rally of typhoon-themed stocks is unfolding as the super typhoon ‘Hinnamnor’ approaches. With growing expectations for reconstruction after typhoon damage, these stocks have been hitting the daily upper limit, but experts advise that riding on baseless stock price increases could be speculative.

In the early trading session on the 6th, Korea SE rose nearly 25%. Until the previous day, it had hit the daily upper limit for three consecutive days. The stock price, which was 2,585 KRW per share on the 30th of last month, soared to 7,450 KRW by that morning. This is the highest price since its listing in 2008.

This company manufactures permanent anchors, tie cables, and other products used for natural disaster recovery. As significant damage was expected due to Hinnamnor’s northward movement, the stock price surged. Coincidentally, on the 2nd, a disclosure of a major shareholder change (GP Club) was also announced, causing the stock price to jump sharply.

Besides Korea SE, other companies such as Uwondevelopment (31.07%) and Nature and Environment (11.56%) showed strong performance over the recent four trading days until the previous day, driven by expectations for typhoon reconstruction. Uwondevelopment is engaged in road construction and civil engineering industries, while Nature and Environment is involved in natural river creation projects and eco-friendly seawall construction projects.

Experts expressed concerns about this phenomenon. Seol Taehyun, a researcher at DB Financial Investment, said, "Every summer, there is a movement to find beneficiary companies related to keywords such as monsoon, floods, and heavy rain, including rental car companies, waste disposal companies, agricultural machinery, and fertilizers." He added, "Looking at the monthly returns of these companies since 2000, it is important to note that the average returns in July and August, when heavy rain is concentrated, were actually lower than during other periods."

Meanwhile, waste disposal companies such as Inseon ENT, Koentec, and Seohan, which attracted attention due to the heavy rain that flooded the Gangnam Station area in early last month, saw their stock prices return to normal afterward.