Greenhouse gas-related stocks rise on gov’t-DP consensus

(Yonhap)

The stocks of South Korean companies linked to greenhouse gas reduction rose on early Monday following reports that the government and ruling Democratic Party reached a consensus to cut the country’s greenhouse gas emissions by 53 to 61 percent compared with 2018 levels by 2035.

Shares of Ecoeye Co. were trading at 12,740 won ($8.75) as of 9:25 a.m. on Monday, up 15.5 percent from the previous session. Shares of ECOBio Holdings Co. gained 24.92 percent, Green Chemical Co. climbed 5.25 percent, and Airrane Co. added 4.51 percent.

The rally follows reports that the government and ruling party have agreed to set the 2035 Nationally Determined Contribution (NDC) target to a range of 53 to 61 percent reduction from 2018 levels.

The government had previously proposed two options – a 50 to 60 percent or 53 to 60 percent reduction – but the newly agreed target exceeds both earlier scenarios.

Officials noted that the decision took into account recommendations from the Intergovernmental Panel on Climate Change (IPCC), the Constitutional Court’s ruling, and domestic industrial conditions.

Meanwhile, banking and financial stocks also gained ground on early Monday following reports that the government and ruling party would pursue measures to ease separate taxation on dividend income.

KB Financial Group shares were trading 5.17 percent higher at 130,100 won as of 9:05 a.m., while Hana Financial Group shares rose 5.33 percent, and Shinhan Financial Group shares advanced 5.17 percent.

Brokerage stocks also gained, with Samsung Securities Co. up 5.31 percent and NH Investment & Securities Co up 5.12 percent.

The surge comes after the ruling party and government‘s decision to ease the separate taxation of dividend income.

Financial stocks, such as banks, are considered representative high-dividend stocks.

On Sunday, Park Soo-hyun, chief spokesperson for the ruling party, announced that the government and ruling party had agreed to pursue easing the separate taxation rate on dividend income from the government’s proposed 35 percent to the Democratic Party’s proposal of 25 percent to stimulate stock market dividends.

“We agreed on the need to devise a reasonable adjustment to the top tax rate that would maximize the effect of dividend market activation without significantly impacting tax revenue,” Park said, noting that the specific tax rate will be finalized during the regular National Assembly session.

Shares of Ecoeye closed 4.17 percent higher at 11,490 won on Monday while those of ECOBio Holdings finished at 3,585 won and Green Chemical at 6,710 won. KB Financial Group shares ended at 129,000 won, Hana Financial Group at 96,200 won, and Samsung Securities at 78,400 won.