By Park Hyong-ki
Staff Reporter
Stocks related to presidential frontrunner Lee Myung-bak soared on news that he was cleared of allegations of involvement in a stock manipulation scheme.
Prosecutors said that there was no evidence to show that Lee had been involved in a financial scam with his former business partner, Kim Kyung-joon who ran the scandal-ridden investment fund BBK.
Following the news, stocks linked to Lee or his relatives _ so-called ``Lee Myung-bak shares'' _ gained on strong retail investments, said Paxnet, an online securities information site. Some small-to medium-sized construction firms are also drawing investors' attention on expectations they will benefit from Lee's campaign promise to construct canals through the southern Korean peninsular.
It said retail investors started their buying spree of these stocks after the news.
Among the so-called Lee Myung-bak shares are Dongshin Construction, Tuksu Engineering & Construction, Sammok Precision and Ee-Hwa Construction. Alongside these, Hankook Tire and Hyundai Engineering & Construction surged as well.
Lee and a senior Hankook Tire manager are in-laws, and he served as a chief executive officer under Hyundai Group founder Chung Ju-yung.
These shares have been on an upswing, benefiting from the leading candidate in the presidential race and Lee's envisioned waterway project.
Dongshin Construction shares closed up 2,600 won, or 14.94 percent, just below the daily limit of 15 percent, at 20,000 won; Tuksu shares climbed 4,900 won, or 14.96 percent, to 37,650 won; Hankook Tire rose 250 won, or 1.33 percent, at 18,950 won; and Hyundai E&C closed up 1,200 won, or 1.42 percent, at 85,400 won.
The benchmark KOSPI closed up 20.37 points, or 1.06 percent, at 1,938.20. The tech-heavy Kosdaq market also rose 2.42, or 0.32 percent, to 749.95.
However, analysts warn that these shares of companies are ``not directly'' linked to Lee, cautioning investors not to make hasty judgments when investing in them, but to do so after sufficiently reviewing their fundamentals.
The companies have also mentioned that they are not directly tied with the presidential candidate.
``Since the summer, most of these shares have been gaining on favorable sentiment about the waterway idea by Lee. But the shares, I believe, have shot up too much compared to their proper valuation,'' said Won Jong-hyuck, an analyst of SK Securities.