SEOUL, Jan. 26 (Korea Bizwire) – South Korea’s top 10 business groups saw the market value of their listed affiliates plunge this year mainly due to increased overseas volatility, data showed Tuesday.
The combined market capitalization of their listed companies came to 721.99 trillion won as of Monday, down 4.49 percent from 755.93 trillion won tallied for the end of 2015, according to the data by the Korea Exchange (KRX).
The contraction is more severe than the 3.51 percent drop in market capitalization for the stock market as a whole, and reflects the impact felt by the country’s largest conglomerates to the latest developments like the slowdown in China’s growth, the move by the U.S. Federal Reserve to mark up interest rates, and weak global crude oil prices.
“South Korea’s biggest companies are invariably export-oriented so unfavorable external developments naturally hurt their stock prices,” said Kim Yong-gu, a researcher at Samsung Securities Co.
He said while export driven companies took hits, those that cater to domestic consumption and make cultural content with focus on the Chinese internal market, like CJ and Lotte, did better.
Among the big groups, Hanwha’s stocks were worth little over 15.8 trillion as of Monday, a plunge of 9.26 percent from 17.41 trillion won as of late last year. The conglomerate is centered on chemicals, construction, financial services and defense.’
Samsung, the country’s largest family-run group, or chaebol, posted a 6.3 percent drop in equities value, with corresponding numbers for tech giant LG, and mobile service provider SK dropping 5.43 percent and 5.28 percent, respectively.
Shares of Hyundai Motor Group, the country’s No. 1 carmaker, were down 4.37 percent, while cosmetic manufacturer Amore Pacific Corp. and steelmaker POSCO reported a 3.53 percent and 1.23 percent drop in value in the first 25 days of this year.
In contrast, CJ stocks climbed 8.11 percent to 28.42 trillion won, while Lotte managed to edge up 1.22 percent to more than 25.27 trillion won. Share prices of Korea Electric Power Corp., South Korea’s state-controlled electric utility company, advanced 1.64 percent to 38.04 trillion won.
By individual company, shares of household goods maker LG Life Sciences surged 16.7 percent in the cited period, followed by contents provider CJ E&M and CJ Korea Express, a logistics company.
KRX said luxury retailer Hanwha Timeworld and builder Samsung Engineering witnessed their stock value plummet 26.8 percent and 25.8 percent, each, coming into this year.