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[Newsmaker] Size of Samsung equity funds nose-dive on pharmaceutical crisis

The size of equity funds operated by South Korean brokerage houses that invest in affiliates of Samsung Group nose-dived throughout this year, apparently as its pharmaceutical arm faced a crisis for its alleged accounting fraud, data showed Sunday.


According to the data compiled by market tracker FnGuide Inc., the market capitalization of the country's top 25 Samsung equity funds came to 1.7 trillion won ($1.5 billion) as of Thursday, down 523 billion won from the start of the year.

Samsung Group is South Korea's No. 1 family-run business conglomerate that controls Samsung Electronics Co., the world's largest maker of semiconductors and smartphones.

The decrease compares with the overall growth of 7.3 trillion won for all  equity funds invested in South Korean firms over the cited period.

The average revenue from Samsung-related funds came to minus

6.39 percent, slightly better than the minus 17.94 percent posted by all of local equity funds.

Over the past one month, however, Samsung stock funds lost 7.09 percent, performing worse than the average loss of 4.36 percent of local equity funds in general.

Market watchers said the recent decrease came as South Korea's financial regulator acknowledged earlier this month that Samsung BioLogics Co., a pharmaceutical arm, intentionally violated accounting rules ahead of its initial public offering in 2016.

The trade of Samsung BioLogics' shares on the main bourse was suspended afterward, with some anticipating that the decision could lead to the delisting of the company.

Local Samsung equity funds are anticipated to remain in the doldrums for the time being, as other Samsung affiliates are also facing a tumble on the market, they added.

Shares of Samsung C&T Corp., the de facto holding firm of the Samsung conglomerate, closed at 99,200 won Friday, down 22.1 percent from the first trading session of 2018.

Samsung Electronics, the leading affiliate in Samsung, closed at 42,400 won on the main bourse at the end of last week, down 18.3 percent from May 4, when the company returned to the market after carrying out a 50:1 stock split. (Yonhap)