Yeosu firms top target for investors
Yeosu’s victory in a vote early yesterday to pick the host of the 2012 World Expo sent many of the share prices of companies doing related businesses or owning real estate in the city in Korea’s southwest higher yesterday.Market analysts, however, cautioned against blind investment in the area.
Sigong Tech, a builder specializing in expo facilities, rose by the daily limit of 15 percent, closing at 5,000 won ($5.40). The company participated in building ahead of the Daejeon Expo in 1993. Y-Entec, an industrial waste management company based in Yeosu, also rose by the daily limit, to 6,030 won.
Namhae Chemical, DSR, Taekyung Chemical and Dong-A Steel Technology, companies that have real estate in the city, all hit the daily ceiling. The nation’s benchmark stock market Kospi rose 4.46 points as a whole, or 0.2 percent, to 1,859.79 points.
Heo Moon-wook, an analyst at Samsung Securities, said shares of construction companies are also becoming lucrative as Yeosu is expected to need up to 8 trillion won worth of additional infrastructure.
Some construction companies saw their share prices rise on the day; GS Engineering and Construction rose 4.3 percent and Halla Engineering and Construction climbed 7.9 percent.
Oh Seung-hoon, an analyst at Daishin Securities, said investors need to take a long-term approach.
“Without any fundamental change in the value of companies, putting money in them just because they appear to be related to the Yeosu Expo is undesirable, as has been proven in similar cases in the past,” Oh said. “Investment in those companies can be justified only when it becomes clear they will benefit from the Yeosu effect.”
Meanwhile, real estate prices in the region are also rising.
“It is hard to find houses or land for sale amid rumors that land prices will surge. Owners want to take advantage of the development rush in Yeosu,” said Jeong In-su, the owner of a manufacturing company in Sora-myeon, Yeosu.
According to local real estate agents, some homeowners raised the prices of their homes overnight by 5 million to 10 million won.
The price of rice fields in Sora-myeon have almost doubled to 150,000 won per square meter as of yesterday, from 90,000 won last year.
By Moon Gwang-lip Staff Reporter/ Hong Byung-gee JoongAng Ilbo [joe@joongang.co.kr]
with the Korea JoongAng Daily
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