Kogas tender drives stocks

Battered South Korean shipyard shares received a boost today as Korea Gas Corp (Kogas) released a long awaited tender for six LNG carriers.

Hyundai Heavy Industries, DSME and Samsung Heavy Industries saw their stock price progress after state-run Kogas released the KRW 1.3 trillion ($1.28bn) tender.

“The only way they can go now is up,” Park Moo Hyun, an analyst at Hana Daetoo told Bloomberg

“Earnings can’t get any worse than the second quarter. The bright side to this is that there is still strong demand for new ships.”

HHI stock rose 3% to KRW 137,500 despite reporting a slip in orders today, while DSME progressed 4.66% to KRW 23,600 per share. SHI was up 3.29% to KRW 26,650 per share.

“The stock prices of Korean shipbuilders have hit the bottom,” Sokje Lee, an analyst at JPMorgan Securities, said in an interview with Bloomberg.

“Share prices will see sharp gains toward year-end.”

As TradeWinds has reported, the Kogas tender has been much anticipated, amid speculation about the number of vessels it would need.

Word in the market was that yards had been asked to hold six slots of 2017 delivery, while some had previously expected the tender to run to seven vessels.