The presidential office unveiled the “MASGA” (Make American Shipbuilding Great Again) cap on August 3. “MASGA” is a slogan created by the Ministry of Trade, Industry, and Energy to succinctly convey the shipbuilding cooperation details in the recent U.S.-South Korea tariff negotiations. The South Korean negotiation team prepared this cap along with large panels for the occasion. (Yonhap)
SEOUL, Aug. 10 (Korea Bizwire) — Following the recent U.S.-South Korea trade agreement, South Korea’s shipbuilding stocks have seen a significant rise, propelling related exchange-traded funds (ETFs) to top performance rankings. The surge in stock prices has drawn substantial interest from individual investors, sparking speculation on whether the upward trend will continue.
As of August 8, the “TIGER Shipbuilding TOP10″ ETF, which tracks the performance of major South Korean shipbuilding companies, posted the highest return of 30.8% over the past month.
The ETF includes companies such as Hanwha Ocean, HD Hyundai Heavy Industries, HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries, and HD Hyundai Mipo Dockyard.
Another ETF, “SOL Shipbuilding TOP3Plus,” closely followed with a 30.7% gain during the same period. Other top-performing ETFs include “KODEX Eco-Friendly Shipbuilding & Shipping Active,” which rose 26.6%, and “HANARO Fn Shipbuilding & Shipping,” which climbed 22.8%.
The sharp rise in shipbuilding stock prices follows the conclusion of the U.S.-South Korea trade negotiations, in which the U.S. committed to a $1.5 trillion shipbuilding cooperation fund under the “MASGA” (Make American Shipbuilding Great Again) project.
This deal boosted market sentiment, especially as Hanwha Ocean reported second-quarter earnings exceeding market expectations, further fueling investor confidence.
As of August 8, the total market capitalization of the 10 companies in the “TIGER Shipbuilding TOP10″ ETF reached 136.66 trillion won, up 27.67 trillion won from the previous month. Retail investors have been active, with individual purchases totaling 53 billion won for “TIGER Shipbuilding TOP10″ and 27 billion won for “SOL Shipbuilding TOP3Plus” over the past month.
Analysts are optimistic about the potential growth of South Korean shipbuilders in the U.S. market, with expectations of increased collaboration under the MASGA project. This could involve technology exchanges, workforce training, joint construction projects, and equity investments.
However, some analysts urge caution, noting that the long-term impact of the U.S.-South Korea shipbuilding collaboration on domestic companies’ performance remains uncertain. There are concerns regarding the specifics of the investment plans, potential risks in expanding U.S. operations, and the challenges of securing talent and managing supply chains.
While government-backed financial and policy support may expedite expansion, risks such as unclear returns on investment and operational uncertainties remain key considerations.
M. H. Lee (mhlee@koreabizwire.com)