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Private prison stocks surge on Trump win

Shares of private prison stocks have soared following Donald Trump's election victory. Trump has said he favors the use of private prisons, which have been criticized by rights groups.

Shares of private prison companies Corrections Corporation of America and the GEO Group jumped 48.1 percent and 20.8 percent, respectively, on Wednesday after president-elect Donald Trump delivered a surprise electoral victory.

Trump said at an event in March that the US prison system was a "disaster" and private prisons "seem to work a lot better" than government run institutions.

The Obama administration in August announced it would stop renewing contracts with private prison companies running federal prisons after the Justice Department found them to be more costly and less safe than public prisons.

Deputy Attorney General Sally Yates said at the time the goal was "reducing -- and ultimately ending -- our use of privately owned prisons."

Privat geführtes US Gefängnis (picture alliance/AP Photo/M. Humphrey)

Privately run Trousdale Correctional Center in Tennessee

The decision was anticipated to impact 13 privately run prisons holding more than 22,000 people, or about 11 percent of the federal prison population. Most of those were foreign nationals, many Mexicans being held of immigration violations.

The decision did not impact privately run state prisons.

About 70 percent of detainees at immigration detention centers are held in private facilities, according US Immigration and Customs Enforcement.

Trump has vowed to deport millions of illegal immigrants from the country, a potential boon for the private prison industry.

Human Rights Watch and the American Civil Liberties Union have been vocal opponents of the for profit prison system.

cw/bw (AFP, AP)

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