SEOUL, KOREA - Shipbuilding shares are on the rise on expectations that the global ocean plant and marine engineering market would expand quickly. At 9:11 am on August 27, the shares of Hyundai Mipo Dockyard were traded at 136,000 won, up 1.12 percent from the previous day's 134,500 won, continuing a three-day rally. Other shipbuilding shares such as Daewoo Shipbuilding & Marine Engineering (0.83%) and Hyundai Heavy Industries (0.23%) also saw their prices rise on the day.

 

KDB Daewoo Securities said of this that the world's ocean plant market has entered a five-year boom cycle and the "Big Three" Korean shipbuilders would see a brighter future any time soon. KDB Daewoo Securities analyst Sung Ki-jong said, "For the next five years, the demand for drill ships and other related equipment will rise steadily as more oil and gas explorers go deeper into the ocean to discover new wells. Given Korea's three largest shipbuilders are highly competitive in the FPSO [floating production storage and offloading] area, they will benefit mightily from the new business cycle."

 

Samsung Heavy Industries is known as the world's best producer of drill ships while Hyundai Heavy Industries in FPSO. The analyst maintained a "buy" opinion on Hyundai Heavy based on his prognosis.