SOUTH Korean container shipping stocks are falling amid concerns about an economic downturn and lower freight rates that have dropped 80 per cent from their peak, reports Hellenic Shipping News Worldwide.
Hyundai Merchant Marine (HMM) shares have gained up to 16 times since the Covid crisis, but they now remain sluggish.
Shares of exchange-traded funds (ETFs) that track transportation indices on the Korean Exchange (KRX) remain low.
The KODEX Transportation ETF fell 38 per cent from its peak in July 2021.
HMM accounts for 18.4 per cent of the KRX Transportation Index, the largest after Korean Air Lines Co at 23.6 per cent.
The Shanghai Containerized Freight Index (SCFI) recently fell 4.2 per cent.
The index declined for 26 straight weeks last year and 79 per cent from its peak in early last year.
"Spot rates have declined to the break-even point level," said NH Investment & Securities Co analyst Jung Yeon-Seung.
"Shipping companies will try to continue to hold on to the rates by cutting supply."