[Special Stock] Defense Stocks Rally on 35 Billion Dollar Cooperation Deal with UAE

As the governments of Korea and the United Arab Emirates (UAE) signed a 35 billion dollar (about 50 trillion won) "Defense Cooperation Framework Memorandum of Understanding (MOU)," defense stocks are showing strong gains across the board.

As of 9:27 a.m. on the 27th, Korea Aerospace Industries is trading at 189,700 won, up 5,800 won (3.15%) from the previous day. During the session, it climbed to 192,300 won, marking a new 52-week high. Hanwha Systems is up 4.70%, LIG Nex1 3.38%, Hyundai Rotem 2.95%, and Hanwha Aerospace 1.59%.

The previous day, Kang Hoonshik, presidential chief of staff, announced that Korea and the UAE had agreed to pursue cooperative projects worth more than 65 billion dollars. The two countries agreed to pursue cooperative projects worth more than 35 billion dollars in the defense industry alone.

Jeong Dongik, an analyst at KB Securities, said, "In the case of cooperation in the defense sector, the two sides signed a Defense Cooperation Framework MOU and agreed to strengthen cooperation across the entire life cycle, going beyond a simple buyer-seller relationship for weapons to include design, personnel training, and maintenance." He added, "We believe this MOU will serve as another opportunity to elevate the status of Korea's defense industry by one more level. This is not only because of the symbolic significance of the roughly 50 trillion won scale, but also because, through an agreement on comprehensive cooperation ranging from development to maintenance that goes beyond simple sales, a structural and long-term growth model has been established."