‘I am well aware of Korea’s world-class warships and shipbuilding capabilities,’ Trump said, adding, ’We need to work closely with Korea not only in exporting our ships but also in refurbishing, repairing and overhauling them.’ Pictured is the HD Hyundai Heavy Industries shipyard.
SEOUL, Nov. 9 (Korea Bizwire) – South Korean markets experienced sharp divergence on November 7 as Donald Trump’s election victory triggered significant movements across different sectors, with shipbuilding companies surging while clean energy stocks tumbled.
The former U.S. president’s conversation with South Korean President Yoon Suk Yeol, during which he expressed interest in bilateral shipbuilding cooperation, sparked an exceptional rally in maritime industrial stocks. Hanwha Ocean led the gains on the KOSPI, soaring 21.76% to close at 33,850 won.
“America’s shipbuilding industry needs Korea’s help and cooperation,” Trump told President Yoon, specifically noting South Korea’s “world-class warship construction capabilities” and expressing interest in expanding collaboration beyond vessel exports to maintenance and repair services.
Other shipbuilding giants followed suit, with HD Hyundai Heavy Industries jumping 15.13% and Samsung Heavy Industries rising 9.17%. HD Hyundai Marine Solutions also gained 8.11%.
Defense stocks showed remarkable strength, buoyed by expectations that Trump’s demands for increased defense spending from major allies could create new export opportunities. Hanwha Aerospace and LIG Nex1 both reached 52-week highs, climbing 4.52% and 3.66% respectively. Korea Aerospace Industries also touched a new yearly high despite a more modest 1.82% gain.
A K9 self-propelled howitzer, manufactured by Hanwha Aerospace Co., is on display during the Association of the United States Army (AUSA) 2024 Annual Meeting and Exposition at the Walter E. Washington Convention Center in Washington on Oct. 14, 2024. (Image courtesy of Yonhap)
“We anticipate expanded opportunities for defense exports in the medium to long term, driven by NATO’s accelerated defense spending and weapons procurement, along with strengthened cooperation between South Korea and NATO,” said Byun Yong-jin, an analyst at iM Securities.
However, the market’s enthusiasm for traditional industrial stocks was matched by an equally sharp decline in clean energy shares, as investors grappled with Trump’s historical skepticism toward renewable energy policies.
Samsung SDI hit a three-month low, falling 3.52% to 288,000 won, while SK Innovation dropped 4.51%. Battery materials manufacturer L&F saw an especially steep decline of 7.83%, closing at 106,000 won.
Solar energy stocks were particularly hard hit, with Hanwha Solution, the parent company of Hanwha Qcells, plunging 5.87% to a 52-week low of 18,920 won. OCI Holdings and OCI, which produce polysilicon for solar panels in Malaysia, both recorded 52-week lows with drops of 4.98% and 4.76% respectively.
The sell-off in clean energy stocks followed Trump’s campaign promise to eliminate Advanced Manufacturing Production Tax Credits under the Inflation Reduction Act (IRA). During his previous administration, Trump criticized wind and solar power for their high costs and relatively low power generation efficiency.
“If Republicans gain control of both the Senate and House, there’s a possibility of IRA tax credit subsidies being eliminated,” said Jung Won-seok, an analyst at iM Securities. “Even without congressional control, Trump could significantly influence IRA implementation through executive orders.”
M. H. Lee (mhlee@koreabizwire.com)
