SEOUL — South Korean defense stock prices increased on Tuesday. Hanwha Aerospace stock increased by up to 11.8 percent, and Hyundai Rotem stock increased by up to 12.67 percent. LIG Defense & Aerospace stock increased to approximately the 30 percent daily upper trading limit on the Kospi index, and Firstec stock increased to nearly the 30 percent daily upper trading limit.

Investors anticipate resumed defense export negotiations and increased regional orders, according to a note published by Mirae Asset Securities on June 16. Kang Tae Ho, an analyst at DS Investment and Securities, said, "The end of the Iran war would serve as a positive catalyst for the Korean defense industry."

Hanwha Aerospace previously suspended negotiations with Saudi Arabia due to the conflict. Hyundai Rotem, which manufactures the K2 Black Panther main battle tank, had been involved in discussions to export 250 K2 main battle tanks to Iraq. Firstec manufactures components for ground combat vehicles.

"Securing orders will become a reality once negotiations resume following the end of the war," Kang said. The company announced the K2ME model in March and indicated it would target the Gulf market for armored vehicles. "Considering that the development of the Middle East-specific derivative model, the 'K2ME,' has already been completed, we believe there is a high probability that a contract will be signed in the second half of this year or the first half of 2027." Kang said.

LIG, which manufactures the Cheongung air defense system, also known as the M-SAM, has seen its system deployed in the United Arab Emirates. Vikas Pershad, a portfolio manager for Asian equities at M&G Investments, said, "Defense spending is increasingly being driven by longer-term strategic considerations rather than any single geopolitical event, and those trends remain intact."