Monday, December 5, 2011

Hyundai, Samsung May Jump 80% on Demand for Oil Drilling Ships, Mirae Says

South Korean shipbuilding stocks may jump as much as 80 percent in four months as they catch up with gains in oil prices, according to Mirae Asset Securities Co., an affiliate of the nation’s second largest money manager.

The Korea KRX Shipbuilding Index (KRXSHIP), which tracks Hyundai Heavy Industries Co., Samsung Heavy Industries Co. and eight other shipbuilding stocks, may rebound as rising oil prices spur demand for drill ships and liquefied natural gas tankers, said Lee Sokje, a Seoul based Mirae analyst. The index has tumbled 42 percent since reaching the highest this year on May 2.

“Looking at how oil prices are doing, it’s only a matter of time before shipyard shares follow,” Lee said by phone on Dec. 2. “This is a very good opportunity to buy.”

Brent crude, the benchmark used to price two-thirds of global oil supplies, has jumped about 9.8 percent since Oct. 4 because of easing economic concerns and political tensions in Iran. The price may rise to $127.50 a barrel at the end of next year as the global economy avoids recession, Goldman Sachs Group Inc. said in a Dec. 1 report. It traded at $109.60 Dec. 2..... Read the entire article.

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