Expectations for cooperation with the United States have caused stock prices in the shipbuilding sector to soar, leading to Hanwha Ocean being designated as an investment caution stock following HD Hyundai Heavy Industries.
The Korea Exchange announced on 14th that it will designate Hanwha Ocean as an investment caution stock. The designation date starts from the 17th. The exchange designates stocks that require investor attention due to dramatic price jumps over a certain period as market alert stocks, progressing from investment caution stocks to investment warning stocks and then to investment risk stocks. Trading may be suspended starting with investment warning stocks.
The stock price of Hanwha Ocean has more than tripled over the past year, meeting the criteria for designation as an investment caution stock. Hanwha Ocean's stock rose by 237.2% (54,800 won) from a closing price of 23,100 won on Feb. 14 last year to a closing price of 77,900 won on that day. During trading on that day, the stock price reached a new all-time high of 79,500 won.
U.S. President Donald Trump has expressed his willingness to cooperate with South Korean shipbuilders, resulting in a steep rise in stock prices. A proposal has also been introduced in the U.S. Senate that would allow naval vessel construction to be entrusted to allied countries, further boosting stock prices.
HD Hyundai Heavy Industries was also designated as an investment caution stock beginning on that day. This is because HD Hyundai Heavy Industries recorded a stock price increase of 231.5% (255,600 won) based on the closing price on the 13th.
However, due to the designation of HD Hyundai Heavy Industries as an investment caution stock, its stock price fell by 8.61% (31,500 won) on that day. This is the largest drop since the so-called 'Black Monday' on Aug. 5 last year.