Korean battery, materials shares bullish on perceived Harris debate win

The assessment that Vice President Kamala Harris came out on top in the U.S. presidential debate spurred investor sentiment in Korea on hopes of continued policies beneficial to local firms.

A monitor shows former President Donald Trump, left, and U.S. Vice President Kamala Harris during a presidential debate in Philadelphia, Pennsylvania, on Tuesday. [XINHUA/YONHAP]

Shares of Korean battery makers and materials companies finished bullish on Wednesday after the first U.S. presidential debate between Democratic candidate Kamala Harris and her Republican opposite number, Donald Trump, in Philadelphia, Pennsylvania, on Tuesday.

Harris, who took the Democratic baton from President Joe Biden in the race for the White House, pledged clean energy policies that Korean firms find more favorable, whereas Trump vowed to aggressively support fossil fuels.

Samsung SDI, one of the three largest battery manufacturers in Korea, jumped 9.9 percent to close at 366,000 won ($273) on Wednesday. It rose 5 percent in just an hour from 10:50 a.m. as the debate was unfolding in the Korean time zone.

LG Energy Solution, the country's largest battery firm, closed up 5.14 percent at 399,000 won, while SK Innovation, which owns battery subsidiary SK On, rose 1.1 percent to 110,900 won.

"It seems like investor sentiment followed the judgment that Harris claimed victory over Trump in the debate, and the subsequent hope that she will continue many of Biden’s measures," Hwang Sei-woon, a researcher at the Korea Capital Market Institute, told the Korea JoongAng Daily.

"A Harris win in the presidential race also means a higher possibility of maintaining the Inflation Reduction Act [IRA] at the current size, which is also good news for domestic companies financially and strategically."

Donald Trump, left, and Kamala Harris square off in a U.S. presidential debate at the National Constitution Center in Philadelphia, Pennsylvania, on Tuesday. [AFP/YONHAP]

As vice president, Harris contributed to the passage of the IRA in 2022, which provides an array of corporate tax credits mostly related to EVs built in the United States. Korean battery makers have or are expected to receive billions of dollars in incentives.

As a senator from California in 2019, Harris also co-sponsored the Zero-Emission Vehicles Act, which requires 100 percent of new vehicles in the United States to emit no greenhouse gasses by 2040.

According to a CNN poll of debate watchers conducted by research firm SSRS, 63 percent of registered voters said Harris turned in a better performance onstage, while 37 percent were positive toward Trump. Before the debate, the same voters were evenly split.

Battery materials companies also ended higher Wednesday, with Posco Holdings rising 3.3 percent to close at 342,000 won, while its cathode materials-making subsidiary surged 8.93 percent to close at 219,500 won.

EcoPro closed up 2.75 percent to end at 74,600 won.

The pervasive optimism on the trading floor is also backed by the Korean government's establishment of a battery forum on Wednesday led by both the ruling and opposition parties to hold regular in-depth discussions to set supportive policies for the battery industry to help tackle uncertainties like the faltering EV demand currently plaguing the auto industry.

A total of 15 lawmakers and executives from 20 local battery firms joined the forum.

"The government will spare no expense for the battery industry, in such areas as tech development, business activities and the establishment of a stable supply chain, and will relax regulations and expand incentives," said Industry Minister Ahn Duk-geun during the inaugural meeting at the National Assembly building in Yeouido, western Seoul.

"The battery industry is going through a very tough time today, but the shift to electrification is an irreversible wave."

BY SARAH CHEA [chea.sarah@joongang.co.kr]