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Fri, Feb 07, 2003 - Page 12 News List

Pumyang, Comtec helped by lottery fever in S Korea

BLOOMBERG , SEOUL

Lottery fever is driving up a handful of Seoul stocks as millions of South Koreans bid for a jackpot that officials say may reach 70 billion won (US$59 million), the nation's biggest ever.

Shares of Pumyang Construction Co, a unit of the leading investor in the Lotto organizer, have gained 41 percent in three months, compared with an 13 percent drop in the key KOSPI index.

Ticket printer Korea Digital Media Inc is up 61 percent, and Comtec Systems Co, whose machines read numbers that players choose on their tickets, has climbed 11 percent.

Investors, like the players, risk disappointment. A surge in lottery ticket sales, which tripled last week to 74 billion won, won't produce a leap in company profits, fund managers said.

Take Lee Hong-jae, who manages 500 billion won at Macquarie IMM Asset Management. He's buying tickets -- not shares.

"Lotto ticket sales will only contribute a fraction of the companies' sales and have little impact on their earnings," he said.

Ticket sales have risen more than 20-fold since the Lotto system was introduced in December by Korea Lottery Service, a group of investors led by Pumyang Construction's parent, closely held Pan Ocean Shipping Co. In the weekly contests, bettors choose six numbers from one to 45, hoping to match a random draw that's televised live every Saturday night.

"Everyone's talking about it -- at home, at work and in bars," said Chun Yong-joon, a 33-year-old sportswriter who paid 20,000 won for 10 tickets and says his colleagues also play.

Lottery officials estimate that as many as 7 million people, or about one in six South Koreans, may buy tickets this week.

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