Regulators to Monitor `Lee Myung-bak Stocks’
By Yoon Ja-young
Staff Reporter
The Korea Exchange (KRX), the country's stock market operator, said it is carefully watching stocks related with presidential frontrunner Lee Myung-bak as they are showing speculative rises. The stocks, however, continued to skyrocket Friday.
``We are closely monitoring trading of `Lee Myung-bak shares.' A number of them are under investigation for irregular trading,'' the KRX said.
Stocks linked to Lee, his relatives, or the businesses likely to benefit from Lee's campaign pledge to construct canals across the country, have been gaining on strong retail investments, despite analysts' warning that investors may be making hasty judgments. The rise was stronger after the prosecution announced Lee was cleared of stock manipulation allegations.
The stock market operator said the rise is based on a speculative drive. Market analysts said some speculators are spreading rumors of the link with Lee to move stock prices up. Seoul Securities, for example, once rose over four percent Wednesday on a rumor that it had employed Lee's youngest daughter. The rumor turned out to be false. Namo Interactive skyrocketed on the rumor that its CEO is a college alumnus of Lee. The stock, however, dropped 5.74 percent Friday.
Despite the warnings, Lee Myung-bak shares soared Friday. Sammok Precision, Tuksu Engineering & Construction, Dongshin Construction, and Ee-Hwa Construction, all expected to benefit from the canal plan, rose to their daily ceiling Friday. Hyosung ITX, whose major shareholder is a cousin of Lee's son-in-law, also rose to its daily maximum.
The rise reflects investors' past experiences. SK Group, for example, rose as one of the top conglomerates after receiving a telecommunication business license in 1992. Former President Roh Tae-woo's daughter was married into the SK Group. The telecommunication business remains as the golden egg of the group to date.