Bloomberg News

Victek Shares Rally on North Korean Nuclear Test Report

April 09, 2012

Victek Co. (065450), a South Korean maker of electronic warfare equipment, led gains in the country’s defense-related stocks in Seoul on speculation North Korea is preparing for a nuclear test.

Victek surged by the daily limit of 15 percent to 3,260 won at the close of trading in Seoul, while Speco Co. (013810) jumped 15 percent to 3,895 won. Huneed Technologies (005870), a military communication equipment maker, also rallied 15 percent to 4,600 won. The benchmark Kospi index fell 1.6 percent.

Satellite images show North Korea digging a new tunnel at a site where the country conducted nuclear tests in 2006 and 2009, Yonhap News reported yesterday, citing an unidentified intelligence official. The communist country also plans to launch a long-range rocket this month, raising tension in the region, with the South, Japan and China expressing concern.

“The defense stocks are rising thematically because of North Korea issues,” Chi Ki Ho, a Seoul-based analyst at LIG Investment & Securities Co., said by phone. “They shoot up every time there are related issues.”

Victek shares have surged 99 percent this year, while Speco has risen 49 percent.

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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