27-08-2018

Shipbuilders enjoy share price hike this month

Bucking a weak market trend, shares of major South Korean shipbuilders have traded bullish this month on the back of growth in the price of vessels, market watchers here said.

Shares of Hyundai Heavy Industries Co., the world’s largest shipbuilder by sales, soared 9.86 percent this month to finish at 117,000 won (US$104.46) on Wednesday.

Samsung Heavy Industries Co. spiked 10.20 percent to 7,130 won, and Daewoo Shipbuilding & Marine Engineering Co. surged 11.2 percent to 29,300 won. Hyundai Mipo Dockyard Co.’s stocks also added 1.71 percent to 95,100 won this month.

In all, the market capitalization of the four major shipbuilders expanded 1.49 trillion won this month, according to the bourse operator, Korea Exchange (KRX).

The solid performance is mainly attributable to the rise in the price of ships, experts said. According to the British research firm Clarksons Research, the price of vessels increased 2.5 percent this year, which means an 8.2 percent rise in South Korean currency.

“A series of fresh orders from European customers also boosts hopes for a turnaround in their earnings,” Choi Jin-myeong, an expert at NH Investment & Securities, said.

Others, however, painted a relatively gloomy picture for shipbuilders going forward.

“The current upbeat mood may not be sustainable this year, as new orders so far are still below the level seen last year amid fierce competition in the global shipbuilding industry,” Jeong Dong-ik, an analyst at KB Securities, said.

The new orders the local firms received during the first seven months of this year backtracked 5.9 percent on-year in terms of the number of contracts, and 12.9 percent in terms of price, he noted.

Source: Yonhap

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