South Korean President Moon Jae-in’s support of a government panel to resume building two stalled nuclear reactors sent shares of engineering and construction companies surging.
The recommendation released Friday on the $7.5 billion project came after a nine-member committee gathered public opinion over the past three months about the permanent suspension of the Shin Kori No. 5 and 6 reactor construction, which Moon had proposed during his presidential campaign.
Kepco Engineering & Construction Co. surged as much as 20 percent, Doosan Heavy Industries & Construction Co. gained as much as 12 percent and Kepco Plant Service & Engineering Co. jumped more than 9 percent. Korea Electric Power Corp., the utility known as Kepco, added as much as 5.6 percent.
Even if construction resumes, it will have limited impact on the expansion of renewable energy generation in the country, Jung Yeon-Seung, an analyst at NH Investment & Securities, wrote in a note Friday.
South Korea has 24 nuclear reactors, which provide roughly a third of its energy needs, according to the World Nuclear Association. The Asian nation has the sixth-largest fleet of nuclear reactors in the world, accounting for about 23 gigawatts of capacity.