Construction Stocks Surge Ahead of Semiconductor Cluster Project

Construction stocks are experiencing a significant surge ahead of the government's announcement of a large-scale semiconductor cluster project. This rise is attributed to heightened investor sentiment driven by expectations of increased infrastructure contracts for civil engineering, plants, and housing related to the establishment of national high-tech industrial complexes.

As of 1:26 PM on June 29, the Korea Exchange reported that Namhwa Construction and Kumho Construction both reached their daily price limits, rising 29.94% and 29.86%, respectively. Kyeryong Construction also saw a 24.40% increase, while smaller construction firms such as HL D&I (up 13.82%), Hanshin Engineering & Construction (up 13.08%), and Dongshin Construction (up 12.75%) experienced a broad influx of buying interest.

Major construction companies also showed strong performance, with Hyundai Engineering & Construction rising 12.00%. Other firms, including DL E&C (up 10.03%), Daewoo Engineering & Construction (up 8.85%), GS Engineering & Construction (up 8.15%), and HDC Hyundai Development Company (up 7.79%), also saw gains. However, Samsung C&T experienced a decline of 6.07%.

Market analysts anticipate that the semiconductor cluster project, spearheaded by Samsung Electronics, SK Hynix, and the government, will lead to substantial contracts for land development, factory construction, and infrastructure such as roads, railways, and power facilities, as well as residential area development.

In particular, large construction firms are expected to benefit from increased contracts for advanced factories and infrastructure projects, while regionally based construction companies are likely to gain from industrial complex development and residential and commercial facility projects.

President Lee Jae-myung is set to host a public briefing on the "Three Mega Projects for Korea's Leap Forward" at the Blue House later today. The briefing will outline a plan for a total investment of 2,000 trillion won in the semiconductor, data center, and physical AI industries through public-private partnerships.