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By Anna J. Park
With the country’s vaccine rates exceeding 50 percent early this week, stocks related to travel, leisure and retail are moving up again, reflecting the public’s expectations about the normalization of economic activities soon.
Currently, the government believes that it will reach a vaccination rate of 70 percent by the end of October, and it aims to control the pandemic at the level where the normal operation of daily lives and economic activities is possible.
Now, the economy is preparing for the virus to coexist alongside the growing supply of vaccines and medicines. As the government’s new goal of “living with COVID-19” seems increasingly plausible given that the country reaches a high fully vaccinated rate, reopening stocks enjoyed a rise, despite foreign investors’ recent selling spree over concerns about early tapering.
Airlines are representative of reopening stocks that saw a rise in their stock prices. Korean Air stock prices rose for three consecutive trading sessions from Monday to Wednesday of this week. It finished at 30,300 won ($25.94) on Wednesday, a 1.68-percent increase from the previous session. This week alone, the stock rose by 9.7 percent from last Friday’s 27,600 won.
Asiana Airlines rose for three consecutive sessions this week as well, finishing at 20,900 won, a 3.98-percent increase, at Wednesday’s closing. During this week alone, the stock logged an 18.7-percent increase, compared to last Friday’s closing price of 17,600 won. Low-cost carrier Jin Air also showed a similar upward movement pattern this week, with an over 12.3-percent increase during the three trading sessions this week.
“An increase in the won-dollar exchange rate as well as jet fuel prices might incur a rise in cost, yet Korean Air’s strong performance based on the super-boom of cargo and freight is expected to continue during the second half of this year,” Lee Han-jun, an analyst at KTB Investment, said. “Korean Air’s operational profit for 2021 is estimated to log around 536.6 billion won, which is a 392-percent jump year-on-year,” the analyst added.
Tourism companies also enjoyed a bullish run this week, over buoyed expectations about reopening economic activities. HanaTour has been on an upward move for three consecutive days this week, finishing at 75,700 won, a 1.2-percent increase, at Wednesday’s closing. ModeTour also logged stock price increases throughout this week, finishing at 24,250 won, or a 2.75-percent jump.
“Local consumers’ desire for tourism has continued to rise since April of last year. High-income groups’ needs for overseas travel is deemed very strong, as demands for premium travel products, in particular, are expected to be increased,” Yoon Hyuk-jin, an analyst at SK Securities, said, adding that HanaTour is expected to expand its market share at the early stages of the reopening period. The analyst also forecast that the company’s previous record-high price would be replaced with a new record once economic activities are resumed.
Retail stocks such as GS Retail and Lotte Shopping also showed consecutive three-day increases this week, over rosy forecasts that once vaccination rates go further up, their revenues will be recovered quickly. GS Retail finished at 34,050 won, a 1.34-percent jump, at Wednesday’s closing, while Lotte Shopping rose by 0.94 percent, finishing at 107,000 won.
The casino-related stocks, Gangwon Land and Paradise, rose by 1.3 percent and 0.3 percent, respectively, over expectations about improved revenues in the second half of this year. The stocks also showed a continual increase from Monday to Wednesday, registering a similar pattern with other reopening stocks.
Travel, leisure stocks rebound as vaccination gains momentum
Source: Buhay Kapa PH
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