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¡°Buy when you hear the rumors, sell when the news comes out.¡± This principle proved right on the mark for buying and selling activity on the KOSPI on Wednesday. As soon as former Grand National Party leader Lee Hoi-chang announced his third presidential bid, the prices of so-called ¡°Lee Hoi-chang shares¡± fell almost instantly.
Danam Communications, for one, had been on an upswing since Oct. 19, driving the stock price from W1,200 to W4,800 (US$1=W906). The company¡¯s largest shareholder happens to be the nephew of the father-in-law of Lee¡¯s eldest son. Shares in the company surged 13.5 percent on Wednesday, but after Lee¡¯s press conference began at 2 p.m., investors went on a selling spree sending the share price down to the limit in less than an hour.
Shares of Anam Electronics Co. soared for four days on information that Kim Joo-chai (also known as Jay Kim), the largest shareholder of Anam Instruments, which holds a controlling stake in the electronics company, is backing Lee. But shares closed limit down on Wednesday. Sajo Industries Co. and Oyang Corporation, whose biggest shareholder Joo Jin-woo is a former chief secretary to Lee, also dropped between 4 and 5 percent.
But shares of companies expected to benefit from the grand canal project of the GNP presidential candidate Lee Myung-bak rebounded into positive territory on Wednesday. Shares of Tuksu Engineering & Construction, Ee-Hwa Construction, Samhodevelopment and Shin Cheon soared to their daily limits in afternoon trade, marking a sharp reversal from losses during the morning.
But the companies say they are perplexed and have no ties to the presidential candidates. The rise and fall of ¡°presidential shares¡± according to political developments is expected to continue until the elections are over.
(englishnews@chosun.com )
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