Expectations for Low Birthrate Policy Pledges... Baby Product Stocks Surge
Entering Presidential Election Phase, Market to Fluctuate with Policies of Leading Politicians
Following the Constitutional Court's approval of the presidential impeachment on the 4th, the political sphere has entered a two-month early presidential election race. In the domestic stock market, where political theme stocks have been rampant for a week, policy-related stocks are attracting attention. Speculative funds aiming for short-term capital gains are pouring into stocks related to prominent politicians mentioned as next presidential candidates, including Lee Jae-myung, the leader of the Democratic Party of Korea.
According to the financial investment industry on the 8th, Erkos rose 112.8% over five trading days this month. During the same period, the KOSDAQ index fell by 3.2%.
Erkos is a food tech company providing 'whole family food solutions' so that the entire family can eat safely, including infant food. It was listed on the KOSDAQ market on February 28 through a merger with Kiwoom SPAC No. 6 via SPAC dissolution. Since its listing, the stock price performance was sluggish for a month until the end of last month. This month, rumors spread that it is a beneficiary of low birthrate policies, causing the stock price to surge.
The flagship brand 'Lusol' includes over 160 types of baby food, nutrition porridge designed for the elderly-friendly food concept, baked goods made from healthy ingredients, and health functional foods. Lusol, which started as a specialized brand for infants and toddlers, directly produces stage-specific baby food and toddler side dishes, rice snacks, etc., tailored to the monthly age of infants and toddlers.
Measures to address the low birthrate have been one of the representative pledges appearing in every election. Early last year, Lee announced the 'Comprehensive Low Birthrate Countermeasures for the Survival of the Republic of Korea' targeting the 22nd National Assembly election. He promised to spare no support throughout the entire process, including housing, assets, childcare, and work-family balance for newlyweds to raise the birthrate.
It is expected that pledges to solve the low birthrate issue will also appear in the early presidential election. Quick investors concentrated on net buying low birthrate-related stocks immediately after the early election was confirmed. Right after the Constitutional Court dismissed the president on the 4th, stocks related to baby products such as Kkumbee, Agabang Company, Zero to Seven, and Mediance surged simultaneously. These stocks continued their upward trend even on the 7th, when the KOSDAQ index plunged more than 5%.
Along with baby product-related stocks, job-related stocks such as Wanted Lab and Openknowl also expanded their gains. Wanted Lab, which operates a recruitment matching platform business, hit the upper price limit for two consecutive trading days on the 4th and 7th.
A financial investment industry official explained, "Over the next two months, the stock market could fluctuate with a single word from a prominent politician," adding, "Many political theme stocks have emerged in the past, but after elections ended, the stock prices of most listed companies returned to their original levels." He added, "As stock price volatility increased, many individual investors experienced losses."
With the early presidential election news expanding the scale of political theme stocks as policy-related stocks, the Korea Exchange held an 'Emergency Market Inspection Meeting.' At the meeting held last week, they discussed strengthening response measures to prepare for increased market volatility after the impeachment ruling. Ahead of the early presidential election, they decided to enhance monitoring of unfair trading and preventive activities related to theme stocks.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
