Frenzied retail buying of stocks tied to electric-vehicle batteries has added more than $11 billion in market value to Korean steelmaker Posco Holdings Inc. and related group companies this month.
(Bloomberg) — Frenzied retail buying of stocks tied to electric-vehicle batteries has added more than $11 billion in market value to Korean steelmaker Posco Holdings Inc. and related group companies this month.
Shares of the parent company have jumped 16% to the highest level since 2011, adding $3.8 billion in market value, on investor expectations for its lithium business. It’s been the most popular stock among South Korean individual investors in April, with net purchases of $1.7 billion.
“With growing demand for EV batteries, securing key raw materials for resource-poor countries like South Korea is crucial,” said Ha In-Hwan, an analyst at KB Securities Co. “And in South Korea, Posco is the only company that can do such business well.”
Among group companies, EV battery-materials supplier Posco Future M Co. is the biggest winner on the blue-chip Kospi 200 index so far this month, gaining 38% and adding $5.8 billion to its market capitalization. The company formerly known as Posco Chemical supplies LG Energy Solution Ltd. and BYD Co.
Group trading house Posco International Corp. drew bullish bets after it said last week it aims to boost its market cap nearly sixfold to 23 trillion won ($17.5 billion) by the end of the decade, mainly by investing in energy and new businesses. Its shares have soared 35% since in two sessions.
Posco Future M “certainly has future growth potential, but the stock price’s rise has been too fast,” said Rho Wooho, an analyst at Meritz Securities Co. Posco International also got a lift after news that Warren Buffett boosted his holdings in Japan’s major trading firms last week, Rho said.
–With assistance from Heesu Lee.
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