The sharp decline triggers concerns of revisit of 2008 financial crisis


The nation’s top 10 conglomerates’ market capitalization declined significantly, by about 130.46 trillion won ($120.59 billion) in the aftermath of the latest stock market volatility.

The amount, tallied as of Aug.12, was roughly equivalent to the 134 trillion won estimated to be needed to restore Japan following the earthquake and tsunami that struck in March.

According to Chaebul.com, a local portal following the activities of larger companies, the market cap of the 92 affiliates of Korea’s top 10 companies plunged to 568.27 trillion won last week, losing almost 20 percent from the 698.73 trillion won it reported on Aug. 1.

The 130 trillion won had evaporated in just 11 days, Chaebul.com said.

During this period, the benchmark KOSPI had fallen by 17.45 percent to 2,172.31 from 1,793.31 points.

The Korean stock market tanked last week after its U.S. counterpart, the Dow Jones Industrial Average, took a nosedive following an unprecedented rating downgrade from Standard & Poor’s.

Most top earning companies in Korea, including Samsung, LG and POSCO saw their stock prices decline to unseen levels, triggering concerns that the markets were being revisited by a financial crisis resembling the Lehman Brothers’ meltdown in 2008.

Among the leading local companies, Samsung Group and its 19 affiliates lost 18.1 percent of market cap after dropping to 253.91 trillion won from 207.96 trillion won.

Hyundai Motor Group also lost about 18 percent, with the listed stocks ― both common and preferred shares ― of its 10 affiliates now worth 133.87 trillion won, down from 29.41 trillion won.

LG Group and its 11 affiliate companies lost 22.5 percent, to fall to 67.23 trillion won from 86.48 trillion won.

SK Group lost 21.7 percent of its market cap, while Doosan Group slid by 23.4 percent, and GS Group by 23.3 percent.

By Kim Ji-hyun (jemmie@heraldcorp.com)