On May 27, shares of the top automaker fell 1.88 percent to 157,000 won from a day earlier, shrinking its market capitalization to 34.58 trillion won. On the other hand, SK Hynix saw its shares increase 0.94 percent to 48,450 won for a market cap of 35.27 trillion won, overtaking the carmaker.
Last November, after the acquisition of KEPCO land in Seoul’s Samseong-dong, Hyundai Motor was also dethroned from its position, overtaken by SK Hynix. This time, it was directly hit by the falling Japanese yen.
In the foreign exchange market, a looming interest rate hike in the U.S. and a stronger dollar weakened the yen. On May 27, the dollar-yen exchange rate rose to 123 yen per dollar, and won-yen rates fell below 900 won during the day.
As Hyundai Motor competes mainly with Japanese automakers, the low yen directly damages the sales of Hyundai cars. However, some expect a rebound in Hyundai shares as they think the yen has bottomed out.
A KDB Daewoo Securities analyst said, “The main cause of Hyundai’s slump in the first quarter was the exchange rate. As it seems to have hit the bottom, Hyundai shares will become an increasingly attractive investment in the second quarter.”
By John Choi (firstname.lastname@example.org)