[Aju News DB]
Buoyed by the prospects of seizing new business opportunities in a sanctions-free Iran, shares in South Korean construction companies soared on Monday despite the KOSPI main stock index skidded to near 5-month lows.
Last weekend, the International Atomic Energy Agency (IAEA) declared that Iran had fulfilled requirements to limit its nuclear activities, a step that automatically lifted nuclear-related economic sanctions imposed by the United Nations, the European Union and the United States. The move ended a prolonged isolation that has driven the country into a deep economic malaise.
On Sunday, South Korea’s trade ministry lifted a ban on trade with Iran in nearly all sectors -- except for strategic products such as nuclear-related materials -- including petrochemicals, automobiles, shipbuilding, shipping, construction and financial services. The Seoul branch of Bank Mellat, an Iranian private bank, will resume its operations soon. The bank’s branch in Seoul was shut down in 2010 as it was on a list of prohibited Iranian businesses.
"With the lifting of sanctions, Korean companies are expected to win major projects in social overhead capital, construction, and shipbuilding. Expanded exports to Iran and imports of crude oil from Iran could be a fresh growth driver for our lackluster economy," the trade ministry said in a statement.
South Korea’s business communities hailed the news, saying the country’s sluggish economy will benefit from the resumption of exports to Iran.
Hyundai Engineering & Construction, Daelim Industrial Co, GS Engineering & Construction and Doosan Engineering & Construction are mentioned by business analysts as the main beneficiaries as Iran is expected to push forward this year with mega infrastructure projects.
According to estimates by the International Contractors Association of Korea, $130 to $145 billion worth of plant, infrastructure, and other construction projects will be placed on the market in the coming years.
In the past decades, South Korean builders had clinched deals worth $12 billion with Iran, but since 2009, there have been few deals due to the economic sanctions that the United Nations imposed for its nuclear weapons program in 2010.
The Seoul branch of Bank Mellat, an Iranian private bank, will resume its operations soon, according to the Finance Ministry. The bank’s branch in Seoul was shut down in 2010 as it was on a list of prohibited Iranian businesses.
By Alex Lee
reporter
Park Sae-jin
swatchsjp@ajunews.com
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