The Korea Herald

소아쌤

Big-spending Chinese tourists, low interest rates lift up 'sin stocks'

By KH디지털2

Published : June 2, 2015 - 09:49

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"Sin stocks" of tobacco, alcohol and gambling companies have gained this year on the back of deep-pocketed Chinese tourists and low interest rates, data showed Tuesday.

Thirty-six sin stocks related to tobacco, alcohol, gambling rose an average of 23.9 percent as of June 1 compared to the beginning of this year, according to the data compiled by market researcher at FnGuide.

Shares of KT&G Corp., the state-run tobacco maker, increased 27.1 percent over the period after it posted stronger-than-expected earnings in the first quarter.

Casino-related stocks have been on a steady rise this year, though they were down on Monday on growing concerns over the spread of the Middle East Respiratory Syndrome, a contagious disease that hit the nation.

Kangwon Land Inc., the nation's only casino open to locals, advanced 30.6 percent, and its smaller rival, Paradise Co., spiked 29 percent over the period.

Among liquor makers, Lotte Chilsung Beverage Co. was the top gainer with a 71.7 percent return after its new Korean liquor with a softer and sweeter taste was well-received in the market.

Game developers in the tech-laden KOSDAQ also have made hefty gains this year as several firms were expanding their businesses abroad.

Shares of Playwith Inc. and YD Online Corp. have nearly doubled this year on an upbeat business outlook for their new online game products.

The stock price of Unidus Corp., a condom maker, more than doubled after the constitutional court scrapped the country's anti-adultery law in February. Analysts said shares related to domestic consumption tend to fare better under a low-growth and low interest-rate environment, with some attributing the stock surge to a rising influx of Chinese travelers.

"Investors are pinning their hopes for expanded consumption on the rising number of Chinese travelers," Lee Kyung-min, a researcher at Daishin Securities, said. "These shares need to be considered as stocks related to Chinese consumption with long-term growth potential, not as sin stocks." (Yonhap)