Hanwha companies rally on 'Trump trade'
Seen above is the USNS Yukon, a replenishment oiler serving in the U.S. Pacific Fleet. Hanwha Ocean said Tuesday it won a repair order for the vessel, marking the second order in the company's master ship repair agreement with the U.S. Navy. Courtesy of Hanwha Ocean
The stock prices of Hanwha Group's affiliates are rallying, sparked by positive outlooks on the shipbuilding, cryptocurrency and space industries, driven by expectations of a second Donald Trump presidency in the United States.
According to the Korea Exchange, shipbuilding unit Hanwha Ocean soared 34.17 percent from 27,800 won on Nov. 6 to 37,300 won on Monday. It closed at 36,800 won on Tuesday, down 1.34 percent from a session earlier, as the benchmark KOSPI and secondary Kosdaq both ended weaker, down 1.94 percent and 2.51 percent, respectively.
On Nov. 7, Hanwha Ocean achieved a 21.76 percent jump after the Korean presidential office announced that Trump told President Yoon Suk Yeol about “the need for a close cooperation with Korea in the maintenance, repair and overhaul (MRO) of ships, as well as in ship exports.”
Hanwha Ocean announced on Tuesday it won orders for repairing the USNS Yukon, a replenishment oiler serving in the U.S. Pacific Fleet. Under the order, Hanwha Ocean will repair the 31,000-ton displacement vessel by next April.
It is the second order that Hanwha Ocean won as part of its master ship repair agreement for MRO with the U.S. Navy. After signing it in July, Hanwha in August secured its first order to overhaul the USNS Wally Schirra, a 40,000-ton replenishment vessel.
Last month, Hanwha Group Vice Chairman Kim Dong-kwan invited Adm. Steve Koehler, the commander of the U.S. Pacific Fleet, to the company’s shipyard on Geoje Island in South Gyeongsang Province, and the commander noted that Hanwha Ocean’s MRO projects mark an important advancement for the Korea-U.S. alliance.
Hanwha Ocean said it is encouraging that Trump is showing an unusual level of support for Korea’s marine defense sector, as this could lay the groundwork not only for MRO collaborations with the U.S. Navy, worth up to 20 trillion won annually, but also for expanding the partnership to include naval shipbuilding in the future.
Visitors watch the Bitcoin price graph at the headquarters of Upbit, a cryptocurrency exchange, in southern Seoul's Gangnam District, Tuesday, when the price broke above $88,000 for the first time. Yonhap
In the financial sector, Hanwha Investment & Securities enjoyed a rally, with its stock price soaring 17.18 percent on Monday and again climbing up 0.96 percent on Tuesday to end at 4,200 won. The company’s preferred stock showed double-digit growth for two consecutive trading sessions to reach 9,590 won on Tuesday.
The surge represents the market enthusiasm for cryptocurrency, as the brokerage holds a 5.94 percent stake in Dunamu, the operator of Korea's largest crypto exchange, Upbit.
Following Trump’s pledge to introduce policies friendly to cryptocurrencies, Bitcoin spiked above $88,000 for the first time on Tuesday, and other cryptocurrencies, such as Dogecoin, are continuing bullish bets.
Hanwha Systems, Hanwha Group’s electronic systems for satellites and other military communications technology unit, also rallied 13.15 percent on Monday and 3.24 percent on Tuesday, on expectations that the Trump administration will create favorable conditions for the space industry, including Elon Musk’s SpaceX.
Analysts estimate that Hanwha Group companies will likely enjoy a bullish turn because the group is running various businesses in industries buoyed by the so-called "Trump trade," but noted that investors may sell those shares before Trump's inauguration.
“Recent election cases suggest that beneficial stocks of an election typically experience strong trading activity for about two to three months after the election, often followed by sell-on trends before the official start of the term,” SK Securities analyst Cho Jun-kee said. “However, given the potential for a strong policy drive, the current trend could potentially last longer.”