South Korean defense stocks surge on prospects for post-Iran-war sales boosts

POCHEON, SOUTH KOREA - MAY 25: South Korea's K-2 battle tanks fire live rounds during the live fire drill at Seungjin fire training center on May 25, 2023 in Pocheon, South Korea. South Korea and the United States are holding combined live-fire exercises on the occasion of the 70th anniversary of alliance. Last week North Korea condemned South Korea and the United States’ combined live-fire drills, describing the drills as a “war exercise” against the nation. (Photo by Chung Sung-Jun/Getty Images) Chung Sung-jun | Getty Images News | Getty Images South Korean defense stocks climbed sharply on Tuesday as the end of the Iran war appeared to be in sight, because the companies may benefit from sales to the Middle East afterward. Hanwha Aerospace, Seoul's largest defense stock, was up as much as 11.8%. Hyundai Rotem, maker of the K2 Black Panther main battle tank, gained as much as 12.67%, and LIG Defense & Aerospace spiked to nearly the 30% limit gain on the Kospi index. Firstec, which makes components for ground combat vehicles, also almost hit the 30% upward limit. Investors increasingly expect defense export pipelines will soon resume and that orders from the region will pick up, Mirae Asset Securities wrote in a note June 16. Kang Tae Ho, an analyst at South Korean brokerage DS Investment and Securities, also said the end of the Iran war would serve as a "positive catalyst" for the Korean defense industry. …