Shipbuilding stocks were strong in early trading on the 9th. As U.S. President Donald Trump said he would increase next year's defense budget by more than 50%, investor sentiment toward Korean shipbuilders improved, according to analysts.
As of 9:51 a.m., Samsung Heavy Industries was trading at 27,850 won, up 1,500 won (5.69%) from the previous session on the Korea Exchange. At the same time, Hanwha Ocean (1%), HD Hyundai Heavy Industries (2.75%), and HD Korea Shipbuilding & Offshore Engineering (4.24%) also rose.
On the 7th (local time), President Trump said next year's defense budget should be increased by more than 50% to about $600 billion, which is seen as improving investor sentiment across the shipbuilding sector.
Seo Jae-ho, an analyst at DB Securities, said, "Among the defense budget increases, the areas expected to see a meaningful share and growth rate are the Navy weapons procurement budget ($32.4 billion) and space and Air Force R&D investment ($23.8 billion)," adding, "If the Trump administration's defense budget surges, Korean shipbuilders engaged in warship programs will be the biggest beneficiaries." Seo pointed to Hanwha Ocean and HD Hyundai Heavy Industries as the biggest beneficiaries.