Construction and reconstruction stocks are soaring following news of a ceasefire agreement between the United States and Iran.
As of 9:50 a.m. on the Korea Exchange, Daewoo Engineering & Construction Co. was trading at 18,710 won, up 1,090 won (6.19%) from the previous trading day. The stock briefly surged to 19,000 won early in the session.
Major South Korean construction firms have significant exposure to projects in the Middle East. Analysts suggest that easing geopolitical risks could lead to increased overseas orders and the resumption of on-site construction, driving investor interest. Daewoo Engineering established a task force dedicated to the Middle East, called the Middle East Reconstruction Task Force, in June.
Other construction and reconstruction-related companies, including DL E&C (up 3.13%), Hyundai Engineering & Construction (up 6.76%), GS Engineering & Construction (up 3.86%), and Samsung E&C (up 2.51%), are also experiencing gains.
On August 25, Russian state news agency RIA Novosti reported, citing sources, that the U.S. and Iran had agreed to a ceasefire that includes provisions for the free navigation of the Strait of Hormuz.
According to military sources from Pakistan and security sources from Iran, both countries are expected to officially announce the ceasefire within days.
However, there has been no official confirmation from the U.S. or Iranian governments as of yet, and the specific details of the ceasefire agreement remain undisclosed.
* This article has been translated by AI.
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