By Kwanwoo Jun

South Korean shipbuilding stocks rallied Thursday after U.S. President-elect Donald Trump said he was expecting South Korea to help the American shipbuilding industry.

Shares of HD Hyundai Heavy Industries and Hanwha Ocean jumped as much as 17% and 22%, respectively, leading a rally in local shipbuilders and outperforming the benchmark Kospi's gain of less than 1%.

The rally followed a phone call between Trump and South Korean President Yoon Suk Yeol to discuss military and economic ties between their countries, including a partnership in the shipbuilding industry.

Trump told Yoon that the American shipbuilding industry needs help and cooperation from South Korea, Kim Tae-hyo, Yoon's deputy national security adviser, told a press briefing, according to South Korea's state television channel KBS and state news agency Yonhap.

"U.S. President-elect Trump's remarks are acting as a catalyst for today's surge in shipbuilding stocks," KB Securities analysts Chung Dong-ik and Seo Jun-mo said in a note Thursday.

Lagging behind China in shipbuilding, the U.S. is increasingly turning to its Asian allies for help.

As China now outnumbers the U.S. in terms of their naval battleship fleets, the U.S. is seeking to bolster and expand business with South Korea's globally well-regarded shipbuilders, including HD Hyundai and Hanwha, which both supply the South Korean navy with warships and submarines.

Both HD Hyundai and Hanwha recently received approval for the first time to do maintenance, repair and operations work for certain U.S. Navy vessels.

In September, the USNS Wally Schirra, a dry-cargo and ammunition vessel, arrived at Hanwha's shipyard for a three-month overhaul. HD Hyundai also expects to field repair projects in the coming months.

Hanwha and a sister company said in June that they agreed to acquire Philly Shipyard--a Norwegian-owned U.S. shipbuilder in Philadelphia--for $100 million.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

November 07, 2024 00:48 ET (05:48 GMT)

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