Stocks of South Korean and Japanese defense suppliers have soared this year as European countries are expected to buy more military equipment from North Asia.
Shares of Hanwha Aerospace, the top South Korean artillery company, have been close to 130% over the past six months, while Japan’s largest defense contractor, Mitsubishi Heavy Industries (MHI), rose 45.5% over the same period.
Both were added this week after German lawmakers supported a €50 billion plan for infrastructure and defense spending.
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Over the past three years, the war in Ukraine has helped drive the value of Hanwha Aerospace and MHI stocks to rise by 500%, while stocks in other entities such as other entities, such as South Korean tank maker Hyundai Rotem, have grown by more than 100% this year, according to contract expectations from Poland and Romania. Financial Times.
These results are not surprising as Trump calls on NATO members to increase defense spending to 5% of GDP and fear that Russian aggression may not end after peaceful settlement with Ukraine.
Japan also said it would increase its defense spending to 2% of GDP over the next two years, while Trump questioned the fairness of its security treaty with the U.S. Tokyo also allows suppliers to increase their profit margins. Several companies look like they may benefit.
Hanwha announced on Tuesday that it has obtained Australian shipyard shares are 9.9%it supports the U.S. Navy and has a service center in San Diego.
Allies need help
The news comes as “Washington is increasingly recognizing its Asian allies’ shipbuilding expertise to keep pace with China’s naval construction.”
Trump is Passionate about reviving American shipbuildingIn the 12 years since Xi Jinping came to power, China has significantly expanded its naval and commercial fleet, which has fallen to a worrying level.
Trump also suggested that given the huge progress and suspicion that the United States could close the staggering output gap developed over the past decade, he might be ready to outsource the production and repair of naval vessels. Compared with the US 297, China is estimated to have about 370 ships and submarines.
“U.S. shipyards have built only five ships in 2023, compared with 1,749 in China, according to the Congressional Research Services Bureau. Report He said he pointed out that U.S. shipbuilding and maintenance programs were so slow that several senators proposed relaxing industry restrictions on foreign participation.
Given that Hanwha acquired a shipyard in Philadelphia late last year, this seems to have happened because of the hope that maintenance and repair work for a few U.S. Navy ships will be secured this year.
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