As the government confirmed the date for the 21st presidential election as June 3, political theme stock trading surged in the stock market. Amid a sluggish stock market due to a "tariff war," it appears that investors flocked in search of high revenue.
On the 8th, according to the Korea Exchange, the most traded stock in the KOSPI market that day was DaiShin Information & Communications. A total of 42.09 million shares of DaiShin Information & Communications were traded in a single day, which is ten times its average daily transaction volume of 4.01 million shares this year. The stock price also jumped 18.64% ($2.75) compared to the previous day.
This is because DaiShin Information & Communications has been associated with former lawmaker Yoo Seung-min. This association has nothing to do with DaiShin Information & Communications' main business—system integration. It is simply because CEO Lee Jae-won of DaiShin Information & Communications is an alumnus of the University of Wisconsin with Yoo.
The top traded stock in the KOSDAQ market that day, DAE YOUNG Packaging, is linked to Minister Kim Moon-soo. DAE YOUNG Packaging became a theme stock because its business sites are close to the site of the "Universal Studio Korea" project that Minister Kim promoted during his term as governor of Gyeonggi Province. Other so-called Kim Moon-soo theme stocks, including Pyunghwa Industrial and Wolvis, were also among the top transactions.
Additionally, Gyeongnam Steel, linked to Daegu Mayor Hong Joon-pyo, and Sunny Electronics, seen as a theme stock for lawmaker Ahn Cheol-soo of the People Power Party, as well as Daesung Private Equity, associated with Governor Kim Dong-yeon, also made it into the top 10 by transaction volume. Daejoo, a theme stock for the transfer of the administrative capital to Sejong City, also recorded the second-highest transaction volume in the KOSDAQ that day. Excluding political and policy theme stocks from the top trading stocks, only Samsung Electronics remains.
As preliminary registration for the presidential candidates has begun, the enthusiasm for investing in political and policy theme stocks is expected to remain high. However, due to the characteristics of political theme stocks, prices often plummet, and in most cases, there are no significant connections to politicians, which requires caution.