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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Eun-mi] Shares of South Korean construction firms surged following news of a U.S.-Iran ceasefire, boosting so-called “reconstruction stocks,” while two members of the controlling family at GS Engineering & Construction moved to sell shares after the rally.
According to the Korea Exchange, on April 8—when the ceasefire news broke—Daewoo Engineering & Construction rose 29.97% to KRW 22,550, while GS E&C climbed 29.86% to KRW 37,400, both hitting their daily upper limits. On the same day, DL E&C and Hyundai Engineering & Construction also jumped more than 20%, while Samsung E&A gained 5.65%.
The rally is attributed to expectations that normalization of shipping through the Strait of Hormuz will drive increased demand for reconstruction of oil refining, gas, and petrochemical facilities in the Middle East. Companies such as GS E&C and Daewoo E&C are seen as potential beneficiaries due to their extensive experience in plant construction projects in the region.
However, the day after GS E&C hit its upper limit, on April 9, GS Entec CEO Heo Cheol-hong and Heo Doo-hong sold voting shares on the open market. Heo Cheol-hong sold 130,000 shares out of his 282,054-share holding at KRW 35,615 per share, securing approximately KRW 4.63 billion. Heo Doo-hong sold his entire stake of 21,429 shares at KRW 35,600 per share, raising about KRW 762.9 million.
GS E&C stated in a disclosure that the transactions were simple disposals. However, the market is closely watching the timing of the sales, which came immediately after the sharp stock price surge. While the moves may reflect short-term profit-taking, they could also be interpreted as a signal regarding future share price trends.
Alphabiz 김은미 인턴기자(kfootle@alphabiz.co.kr)
