Two domestic nuclear power exchange-traded funds (ETFs) faced difficulties from their first day of listing. This was due to news that Korea Hydro & Nuclear Power and Korea Electric Power Corporation had entered into an unfair contract with Westinghouse.
According to the Korea Exchange on the 19th, the 'TIGER Korea Nuclear ETF' by Mirae Asset Global Investments, which was listed that day, finished trading at 9,405 won, down 550 won (5.52%) from the reference price. Similarly, the 'SOL Korea Nuclear SMR ETF' by Shinhan Asset Management, also listed that day, closed at 9,370 won, down 630 won (6.3%) from the reference price.
Recently, interest in investing in nuclear-related stocks has grown, leading these asset management firms to ambitiously introduce ETFs, but the stock prices have failed to perform on the first day. The stock prices of the included companies in these ETFs have dropped. Although these ETFs focus on small modular reactor (SMR) corporations, claims of unfairness regarding the contracts entered into by KHNP and KEPCO with Westinghouse have caused the stock prices of these companies to plummet.
On that day, the leading stocks in the nuclear sector, Doosan Enerbility and Hyundai E&C, closed down 8.6% and 3.76%, respectively. Other nuclear-related stocks, such as KEPCO E&C (down 8.04%), KEPCO KPS (down 8.7%), and Korea Electric Power Corporation (down 5.32%), also fell.
According to media reports the day before, KHNP and KEPCO signed a 'global agreement' in January, which contained conditions stating that when a Korean company exports next-generation nuclear power plants, it must pass Westinghouse's technology independence verification. The agreement included a clause requiring KHNP and KEPCO to enter into a goods and services purchase contract with Westinghouse for each reactor worth $650 million (approximately 900 billion won). Additionally, clauses regarding a technology usage fee of $175 million (approximately 240 billion won) are also included.