Following Hanjin Shipping has climbed by more than 6% since June 7, 2016 from Seoul trading, with Hyundai Merchant Marine (HMM) climbing up 2.4%, according to Bloomberg.
This follows a recent report by PTI that Hanjin and HMM could be merged under the order of the South Korean government.
The government said that this would be feasible if both lines can normalise their management, and would help the country increase competitiveness.
Cho Byoung Hee, an Analyst at Kiwoom Securities Company in Seoul, said: “The government’s comment that a merger may be possible has raised expectations that Hanjin Shipping may be able to survive. Fundamentally, nothing has changed.”
Hanjin is currently making efforts to reduce its charter rates in order to improve its financial situation and enable it to stay afloat in a market affected by weak demand, overcapacity and a slump in freight rates.
HMM was recently able to lower charter rates with ship owners, which would help it decrease its debts and place orders for mega-ships.
This followed recent news that if HMM is able to secure mega-ship orders, this could grant it entry into THE Alliance.