A major beneficiary of the exchange rate rise Shipping stocks are rising all at once ‘broad’
On May 11, shipping stocks rose all at once on various favorable factors, such as rising shipping rates, high exchange rate gains, and expectations of lifting the lockdown in China. This trend is expected to continue for some time.
As of 3:23 pm on May 11th, Korea Shipping is trading at 2,940 won, up 9.5% from the previous trading day. Shipping companies such as Pan Ocean, Honga Shipping and HMM are also trading up 7.08%, 4.46%, and 3.66%, respectively. Taewoong Logics rose 29.53% with the news of a 100% free capital increase.
As the dollar is expected to continue to strengthen due to the increase in the US base rate and the war between Russia and Ukraine, interest in areas where operating profit will improve through foreign exchange gains between the dollar and the won is growing. Because shipping companies receive freight costs in dollars, it is considered a representative industry in which foreign exchange gains increase as the value of the dollar rises.
The won fell to 1280 won against the dollar during the day. This is the highest dollar/won exchange rate in over 25 months since March 2020, right after Corona 19. The dollar index on the 11th also rose 0.25% to 103.94 from the previous day. The dollar index is the value of the dollar against the currencies of major countries.
In addition, international shipping freight rates have also risen. According to the Korea Customs and Logistics Association on May 10, the Baltic Freight Index (BDI), which shows the overall market for bulk carriers carrying iron ore, coal, grain, etc. It peaked in 2022. It has more than doubled in three months.
Jeong Yeon-seung, a researcher at NH Investment & Securities, said, “The increase in iron ore shipments from Brazil is increasing, and the purchase of Australian coal in Europe is increasing, and freight rates are showing strong mainly for large ships.
Some are also discussing the possibility of lifting the blockade of Shanghai Port, China, the world’s largest trading port, and expressing expectations for a recovery in marine cargo demand. There are voices that the throughput of the Shanghai Port in April, which has decreased by 25% compared to the previous year, will normalize.
This is interpreted as the effect of the WHO’s official critical opinion on China’s corona policy on May 10 (local time). WHO Director-General Tedros Adhanom Ghebreyesus said at a press conference, “I don’t think China’s zero-coronavirus policy is sustainable, given the way the virus behaves and what is expected,” WHO Director-General Tedros Adhanom Ghebreyesus said. “We have discussed this issue with Chinese experts,” he said. “I think a policy change is very important.” Mike Ryan, the head of the WHO emergency response team, also said, “The human rights aspect of the zero-corona policy should also be taken into account.”
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