As President Lee Jae-myung's remarks continue to make headlines day after day, the domestic stock market is showing signs of swinging with the so-called "president's mouth." When the possibility of policy support for a specific industry or stock is mentioned, prices shoot straight to the daily limit, while negative comments send them into a steep decline, creating an extreme roller-coaster market.
On the 17th, MetaLabs surged to the daily price limit in the afternoon on the Korea Exchange. The president the day before (the 16th) ordered health insurance coverage for hair loss treatments, drawing a wave of buying.
On the KOSDAQ market, TS Trillion, Withus Pharmaceutical, FromBIO, and Innogene, categorized as beneficiaries of hair loss treatments, all jumped sharply. TS Trillion's performance, in particular, stood out. It had been a representative "penny stock," with trading halted due to a management control dispute and prices stuck in the 200–300 won range, but it gained more than 28% in a single day, proving the market's intense interest.
At a Ministry of Health and Welfare briefing held at the Sejong Convention Center, the president said, "In the past, hair loss was seen as a cosmetic issue, but these days it's a matter of survival," and added, "See how much the expense would be, and if unlimited coverage is too great a fiscal burden, it would be good to consider limits on the number of treatments or aggregates."
He also said, "I heard that designating a treatment under medical insurance lowers drug prices. Please review that as well, including such factors."
Recently, remarks by President Lee Jae-myung have been forming themes, leading to a rash of cases in which related stocks soar and plunge. In particular, in contrast to the surging hair loss theme stocks on the market that day, casino-related stocks weakened across the board, splitting fortunes.
At the Ministry of Culture, Sports and Tourism (MCST) presidential briefing the day before, the president said of foreigner-only casinos, "Aren't they ultimately gambling houses?" and noted, "Casinos generate considerable profit, and it is not reasonable to grant permits for this to the private sector, so keep this in mind when the ministry later makes policy decisions."
As the president took direct aim at the private operating structure of the casino business, investor sentiment froze immediately. Paradise and Lotte Tour Development, Korea's representative casino-related stocks, are currently posting sharp declines, facing policy uncertainty.
In the case of these two stocks, they had been rising on expectations of spillover benefits as China-Japan tensions intensified recently. As of the previous day's (the 16th) close, Paradise shares were up 81% from the start of the year, and Lotte Tour Development had risen 210%.
Dawonsys, which the president publicly rebuked over long delays in railcar deliveries and issues with advance payments, plunged 26% on the 15th when the news broke, and had fallen about 31% through the previous day.
Kim Dae-jong, a professor in the business administration department at Sejong University, said, "Stock prices rise when earnings back them up, but if prices rise or fall based on a single presidential remark or an issue, they end up returning to where they were," adding, "When you invest as a phenomenon similar to political theme stocks appears, you actually suffer major losses."