[Click eStock] POSCO, Sharp Stock Price Drop Is a Buying Opportunity "Rises During Interest Rate Hikes"

[Asia Economy Reporter Lee Seon-ae] NH Investment & Securities announced on the 11th that it maintains a target price of 350,000 KRW and a 'Buy' rating for POSCO. Byun Jong-man, a researcher at NH Investment & Securities, explained, "POSCO's stock price fell sharply by 7.4% due to several issues yesterday," adding, "However, this cannot be the reason for the sharp decline in stock price and is rather considered a buying opportunity."

The issues related to the stock price plunge include the sharp drop in iron ore prices, supply and demand due to block deals, and accusations by civic groups.

On the 9th, iron ore futures prices (Dalian Exchange, March maturity) in China fell by 7.5%, and spot prices also dropped by 6.0%. The decline in iron ore prices was influenced by strengthened steel production supervision in Dangshan City, China, since March to prevent air pollution, and the suspension of unloading at Dangshan Port. However, prices of hot-rolled and cold-rolled steel in the Chinese steel distribution market fell only by 0.7% and 0.2%, respectively. The supply and demand related to block deals is an issue with only short-term effects. It is estimated that the discount rate for the block deal has been sufficiently reflected due to the sharp stock price drop the previous day. Although civic groups filed complaints against POSCO's management for alleged use of insider information, the company provided explanations, and since this requires investigation by authorities, it is judged not to be a matter that would cause a stock price plunge.

Researcher Byun said, "The main variable in the recent stock market is the rise in interest rates, and POSCO's stock price rose during past periods of interest rate increases," adding, "Given that the interest rate rise is due to economic recovery, it is natural for POSCO, a representative company in the steel industry closely related to economic fluctuations, to see its stock price rise."

This content was produced with the assistance of AI translation services.