Daesang stocks soar on link between justice minister and actor Lee Jung-jae
Minister of Justice Han Dong-hoon, right, takes a photo with actor Lee Jung-jae at a restaurant in southern Seoul on Nov. 26. Image captured from a posting on X
The share prices of food conglomerate Daesang Group have soared since Minister of Justice Han Dong-hoon and actor Lee Jung-jae had dinner together at a local restaurant in southern Seoul in late November.
The unexpected connection between the justice minister and the seasoned actor globally known for his role in "Squid Game" has led Daesang Group shares to be labeled as "Han Dong-hoon themed stocks," as the conglomerate's heiress Lim Se-ryung has been the actor's girlfriend for several years.
According to the Korea Exchange (KRX), the price of Daesang Corporation's preferred stock rose by 22.92 percent, as of 2 p.m. on Monday, reaching 20,700 won ($15.8). The stock price soared as high as 29.75 percent at the start of trading earlier in the day, approaching the daily upper price band of 30 percent.
Other related stocks, including Daesang Holdings and Daesang, were also on a strong upward move on Monday, each showing a daily increase of over 7.21 percent and 3.12 percent, as of 2 p.m.
The strength of those stocks is attributed to the recent trading suspension of Daesang Holdings' preferred shares, which led investors to flock to other purchasable Daesang stocks. The preferred stock price of Daesang Holdings hit the daily upper price band for five consecutive trading sessions from Nov. 27 to Dec. 1, until it was suspended due to the short-term overheated transactions. The justice minister and Lee met for dinner on Nov. 26.
As preferred stocks, which prioritize dividend payments without granting voting rights, are typically traded at a discounted price compared to common stocks, investors chasing the short-term frenzy of a politically related stock tend to buy preferred stocks of a company that are associated with political rumors.
Daesang Holdings officially announced through a public disclosure on Dec. 1 that "although the company's stock has recently been associated as a politically related stock, the firm's businesses are not related in any such way."
Actor Lee Jung-jae, left, and Minister of Justice Han Dong-hoon are seen in the same yearbook of Hyundai High School / Image captured from social network services (SNS)
Both born in 1973, the minister and the actor graduated in the same year from Hyundai High School, located in southern Seoul. Han was admitted to the Korean bar in 1995, launching his path to becoming a star prosecutor, while Lee rose to stardom in January of the same year through the SBS drama "Sandglass," one of the biggest-ever hit Korean TV shows.
Han, one of the closest confidants of President Yoon Suk Yeol, is expected to run in the general election scheduled for April next year, and is already regarded as one of the strongest presidential candidates from the conservative political camp.
Despite the market's heated responses to Daesang Group shares, market analysts warn retail investors, advising them to avoid seeking short-term gains from politically related stocks, because "the performance of such shares has nothing to do with a company's fundamentals."
Still, such stocks have continued to draw investors' attention every election season, including both general elections and presidential elections. When a political candidate has any sort of connection with major shareholders of a company, or is associated through relational, regional or family ties to a corporation, those companies' stock prices tend to rise in the lead up to voting.