South Korean defense and shipbuilding stocks, viewed as relatively insulated from U.S. trade policy risks, have rallied in recent weeks, boosting their market capitalization rankings.
Hanwha Aerospace surged to become the seventh-largest listed company on the Korea Exchange by market value on April 11, after its shares climbed more than 5% for two consecutive sessions. Its market capitalization rose to over 36 trillion won ($26.1 billion) as of April 14, up from 28.5 trillion won at the end of March, when it ranked 11th.
Other defense stocks also advanced this month, with Hanwha Systems rising 20.1% and LIG Nex1 up 13.3%.
Rhee Jae-kwang, an analyst at NH Investment & Securities, said, “The defense industry is benefiting from increased military spending in Europe, driven by adjustments in the U.S.‘s security commitments under its ‘America First’ policy, while Middle Eastern countries are also maintaining high defense budgets.”
Shipbuilding stocks have also advanced, with HD Hyundai Heavy Industries climbing to 10th by market value from 12th at the end of March. The stock surged 5.7% on April 11 after U.S. President Donald Trump said Washington may seek congressional funding to rebuild its shipbuilding industry but could also consider purchasing ships from allied nations with competitive shipbuilding sectors.
Other shipbuilding stocks posted strong gains, with HJ Shipbuilding & Construction soaring 39.8%, HD Hyundai Mipo Dockyard rising 25.3%, and Hanwha Ocean up 19.3% so far this month.
“Defense and shipbuilding stocks are being driven by both solid earnings momentum and favorable policy trends,” said Shin Seung-jin, an analyst at Samsung Securities.
