Four months have passed since South Korea decided to deploy a US advanced missile defense system here, but backlash from the announcement continues to weigh on shares of China-sensitive Korean companies, data showed Sunday.
According to data from the Korea Exchange, the combined market capitalization of 10 representative Korean companies sensitive to China-related issues fell 22 percent to 48.23 trillion won ($42.2 billion) as of Friday, from 61.82 trillion won on July 7.
On July 8, Seoul agreed to station the US Terminal High Altitude Area Defense system here to better cope with North Korea’s nuclear and missile threats.
Investor sentiment over China-related stocks have become especially jittery after Beijing last month pushed Chinese travel agencies to reduce the number of Chinese tourists visiting South Korea by more than 20 percent this year compared to last year.
Beijing’s move was interpreted here as an indirect retaliation against Seoul’s decision on the THAAD deployment.
Korea’s entertainment firms, cosmetics and retailers whose businesses are directly related to China suffered 10 to 30 percent losses in shares during the four months.
Meanwhile, it has also become more difficult for Korean stars to engage in the Chinese entertainment business. YG Entertainment’s shares plunged 31.4 percent to close at 27,350 won on Friday from 39,850 won on July 7. S.M. Entertainment’s shares fell 27.9 percent during the cited period.
Cosmetics-maker Cosmax lost 30.6 percent and Korea’s No. 2 cosmetics firm LG Household & Health Care fell 26.7 percent. The industry leader Amore Pacific lost 18.9 percent during the same period.
Shares of Hotel Shilla of Samsung Group shed 21.4 percent and casino operator Grand Korea Leisure fell 18.3 percent.
The fall of such shares is contrasted to the inching up of the Kospi from 1,974.08 to 1,982.02 during the same period.
“Repercussions of the THAAD deployment are still weighing on the market. Related tensions between Korea and China are expected to persist throughout the year,” said Yu Seong-man, an analyst at HMC Investment & Securities, in a report.
By Kim Yoon-mi (email@example.com)