As of 6:21 a.m. on the 4th, the term of Lee Jae-myung, the 21st President of Korea, has officially begun, and the securities industry is keenly examining which stocks will benefit from policy-related gains. However, since expectations have largely been reflected in most stocks during the election process, careful investment is necessary.
According to the securities industry on the 4th, the market is naming securities, renewable energy, artificial intelligence (AI), construction, and local currency-related stocks as beneficiaries of President Lee's pledges. Just as sectors experienced divergence based on policy expectations during the presidential election, it is predicted that there will be differentiation in stock prices among sectors and stocks depending on the direction and intensity of policies after the election.
In the case of securities-related stocks, it is anticipated that they will benefit from President Lee's repeated declarations of opening the 'KOSPI 5000 era.' During the election process, the president-elect stated, "By reducing the dividend income tax on companies with high dividend tendencies and giving disadvantages to those with lower tendencies, we can turn stock investments into alternative investment means."
If the dividend income tax is reduced, major shareholders will have incentives to issue dividends, potentially increasing the dividend tendencies of domestic corporations, and funds may flow into the stock market. As a result, the securities industry has already reflected expectations for stock market activation following the presidential election.
Heo Jae-hwan, a researcher at Eugene Securities, analyzed that "the new government is likely to learn from the aftereffects of real estate policies centered on regulations, and during this process, the stock market and the financial market are highly likely to benefit comparatively."
The Democratic Party's intention to re-promote amendments to the Commercial Act, which would formalize the fiduciary duty of directors to shareholders, may also act as a momentum for the stock market to alleviate factors of the 'Korea Discount' (undervaluation of the Korean stock market).
In addition, regarding the AI industry, which President Lee introduced as his first pledge, Samsung Electronics, SK hynix, and Saltlux are being discussed. In the supplementary budget passed by the National Assembly last month, the budget related to AI was increased by more than 60 billion won compared to the government's proposal. Beyond the hardware sector, there are also AI software companies like Kakao, Naver, HANCOM, and Lunit.
The president-elect has also expressed a commitment to establish a newly created 'Ministry of Climate and Energy' and resolve power issues with a mix of nuclear and renewable energy. There are expectations that demand for related industries will significantly rise, as he announced plans to create resident-participatory RE100 (100% renewable energy use) energy governance such as 'sunshine pension' and 'wind pension.' Beneficiaries such as HD Hyundai Energy Solutions, Hanwha Solutions, CS WIND, and SK oceanplant are being highlighted.
Given the anticipated large-scale infrastructure investments, such as completing Sejong Administrative City, promoting the second transfer of public institutions to the provinces, and advancing the fourth new city development, there is potential for revitalization of the construction industry, which has been recently sluggish. Construction stocks such as Hyundai E&C, Daewoo E&C, and Doosan Bobcat are expected to benefit directly.
Kang Hyun-ki, a researcher at DB Securities, noted, "The likelihood of executing a supplementary budget and interest rate cuts is high after the election, and a recent characteristic is that proactive liquidity expansion for economic recovery is directly absorbed into real estate prices," adding that if the stimulus measures for economic recovery are implemented and the increased liquidity stimulates real estate prices, construction sector stock prices may show a positive trend.
Since the president-elect has decided to strengthen national funding support for local currency, it is expected that companies related to local currency, such as KONA I, WebCash, and COOCON, will also benefit.
However, it is important to consider that expectations for these policy-related stocks have already largely been reflected when investing in beneficiaries after the presidential election. Although there are valid expectations for expansionary fiscal policies following the new government's launch, since the expectations during the election process have already been largely factored in, rather than amplifying hopes, it could provoke profit-taking due to the depletion of ingredients.