Construction stocks surge on govt’s plan to lift greenbelt regulations

[Photo by Yonhap]

South Korean construction stocks, including Shinwon Construction Co., surged on Friday morning, following the government’s announcement that it will lift green belt restrictions in Seoul and its surrounding areas for the first time in 12 years.

Shinwon Construction shares were trading at 3,405 won ($2.48) as of 10:45 a.m. on Friday, up 29.96 percent from the previous session.

The surge comes amid growing expectations that the company will benefit from the green belt release, as it is known to have been involved in a project to develop the Naegok-dong area in Seocho District, southern Seoul.

Other construction stocks also gained, with Sangji Construction Inc. up 26.94 percent to 2,945 won and Woowon Development Co. up 13.28 percent to 2,985 won.

Following a meeting of real estate-related ministers, the Korean government announced on Thursday that it plans to lift the green belt regulations in Seoul and surrounding areas and unveil new housing sites capable of accommodating 50,000 households in November 2024.

It will be the first time in 12 years since the Lee Myung-bak administration that the greenbelt regulations are being lifted.

Meanwhile, shares of Lotte Chemical Corp. fell sharply on Friday morning due to negative earnings projections from securities firms.

Lotte Chemical shares were trading at 80,300 won as of 10:49 a.m., down 10.07 percent from the previous day.

On Thursday, Lotte Chemical disclosed that its operating loss stood at 111.2 billion won in the second quarter, widening from a loss in the same period a year ago. It was the company’s third consecutive quarterly loss since the fourth quarter of 2023.

Securities firms collectively lowered their target prices for Lotte Chemical on the same day, predicting that the third quarter will also see little improvement in its performance.

Hana Financial Investment Co. projected that Lotte Chemical‘s operating loss for the third quarter would reach 100.2 billion won and that it will not be able to swing to a profit until mid-next year.

It lowered its target price for the company from 130,000 won to 100,000 won.