As Eurozone’s Purchasing Management’s Index (PMI) remains firm during July, it is expected that investor sentiment will be buoyed further, leading to a suggestion of the extension of investment towards shipbuilding industry.
Jung Woo-Chang, analyst from Mirae Asset Securities of Korea said, Eurozone’s PMI and the increasing trend of new order in shipbuilding industry showed a relatively high correlation in the past, explaining that, “Eurozone’s firm PMI seen in July will be a significant factor to boost investor sentiment greatly.”
According to the UK-based market research firm Markit Economics, the flash estimate of the PMI for Eurozone manufacturing rose to 50.1 in July, exceeding 50 not seen since July, 2011, on July 24.
Jung said, “The reason why the increasing rate of new order shows the highest rrelation with manufacturing PMI among indexes of Eurozone’s macro economy is that Europe accounts for the highest weight in ship financing market.”
In addition, the analyst forecasted that overcapacity seen in commercial ship market would gradually recover from the second half of this year therefore, new order momentum would continue.