SM Entertainment Soars as Girl Group Announcement Ignite Music Stocks Surge: What Investors Need to Know

K-pop stocks are making headlines! SM Entertainment and JYP Entertainment led the pack, with their shares climbing impressively this week. SM, known for popular groups like Red Velvet and aespa, saw a jump of 13.8%, reaching 78,400 won ($53.76). This surge followed the exciting announcement that a new girl group will debut on February 24. JYP also had a great week, gaining 6.7% to 76,400 won ($52.39). YG Entertainment and HYBE followed with increases of 5.6% and 3.7%, respectively.

These K-pop companies have outperformed the overall South Korean stock market lately. From January 10 to 17, they enjoyed an average gain of 7.5%, far surpassing the KOSPI index’s modest 0.3% increase. This comes as South Korea’s markets stabilize after a period of political unrest following a martial law declaration on December 3. Overall, K-pop stocks are up by an average of 20.6% since their lows in early December.

The Billboard Global Music Index also performed well, rising 4.7% to 2,226.11. This is one of the highest marks it has seen in recent months. Out of 20 companies in the index, only four saw losses, while radio companies led gains with an impressive average increase of 13.3%. Multi-sector companies, including major labels like Universal Music Group, gained 4.3%, while live music companies rose 3.6%. However, streaming companies faced a slight dip, averaging a loss of 1.1%.

A boost came from encouraging economic news. The consumer price index rose by a lower-than-expected 3.2% in December, while wholesale prices increased by only 0.2%. This positive data helped markets globally, with the Nasdaq composite in the U.S. climbing 2.4% and the S&P 500 seeing a 2.9% increase. Meanwhile, the FTSE 100 in the UK rose 3.1%, and China’s Shanghai Composite Index was up by 2.3%.

In the music sector, iHeartMedia stood out with a remarkable 23.9% increase in its stock price, reaching $2.33. The company didn’t have any major news, but the boost came after Barclays announced it had increased its stake significantly. Cumulus Media also climbed 9.1% to $0.84, and SiriusXM saw a 6.9% rise to $22.27.

Spotify shares increased by 5.7% to $485.53 after briefly exceeding $500. Investors reacted to UBS raising its price target for Spotify from $485 to $540. However, Wolfe Research downgraded Spotify’s rating, leading to a slight drop of 1% after its peak.

Concert promoter Live Nation saw a 5.5% rise to $135.61, getting close to its 52-week high. The company is set to co-produce benefit concerts in Los Angeles for wildfire victims.

On the downside, Anghami, a music streaming service based in Abu Dhabi, faced the largest drop, falling 10.3% to $0.70. Deezer also dipped by 5.3% to 1.24 euros ($1.28), while LiveOne shares decreased by 1.7% to $1.18. Nonetheless, LiveOne recently announced reaching 500,000 Tesla users, which might bode well for future growth.