On the 11th in the morning, shipbuilding stocks are surging across the board. Buying appears to be piling in on expectations over the result of Hanwha Ocean's bid for Canada's submarine project and a special law on investment in the United States being discussed in the National Assembly.
That morning, Hanwha Ocean shares were trading near 136,600 won, up around 10%. At the same time, HD Korea Shipbuilding & Offshore Engineering (5.20%) and Samsung Heavy Industries (4.67%) were also strong.
Han Seung-han, an analyst at SK Securities, said of Hanwha Ocean's sharp rise, "With Volkswagen announcing it will stop supporting Canada's submarine-related industry, it seems expectations are building that 'Team Korea' may be in a more favorable position than Germany for this bid."
According to local media, on the 10th (local time), Oliver Blume, chief executive officer (CEO) of Volkswagen, said the company would not be involved in Canada's submarine contract. Earlier, the Canadian government was known to have proposed that Korea's Hyundai Motor build a local plant in Canada and that Germany receive additional Volkswagen facilities.
The analyst noted, "With the special law on investment in the United States set to be placed on the floor on the 12th, expectations for the MASGA ('Make American Shipbuilding Great Again') project are being priced into shares," adding, "The remaining shipbuilding stocks also appear to be rising in a 'keeping in step' pattern."
The special law on investment in the United States produced a bipartisan agreement in a National Assembly special committee the previous day and has been referred to the Legislation and Judiciary Committee. Barring surprises, passage at the plenary session on the 12th is likely.