Companies with greater global exposure lost almost W130tr


The stock value of local conglomerates took a nosedive this month, with the total market capitalization of the nation’s top four companies shedding 128.8 trillion won ($11.8 billion).

The decline over the past 15 days was an average 22.8 percent, a worse performance than the benchmark KOSPI, which fell 19.6 percent in the same period, the Korea Exchange said Tuesday.

The losses made up more than half of the market cap that the local stock markets have shed since the beginning of this month, when share prices started to dwindle amid economic crises in Europe and a sovereign rating downgrade of the U.S. economy.

LG Group-related shares lost more than an average 30 percent of market cap, with LG Chem leading the pack after its stock price suffered an almost 40 percent decline compared to Aug. 1.

LG Electronics and LG Display also have fallen to record-lows, with LG Group shares faltering on the back of the lackluster performance at its affiliates.

The Korean stock market tanked this month after the U.S. suffered a rating cut, while in Europe, the economic conditions have yet to ease up.

Negative forecasts are now emerging, with experts cautiously hinting at the possibility of a double-dip in the world’s top economies.

Morgan Stanley recently said in a report that the U.S. and European economies could slip into a double-dip recession over the next six to 12 months.

Hyundai Motor Group and Samsung Group shares were among the others hit hard by the latest market nosedive.

Hyundai Motor, hit by concerns about exports amid falling exchange rates, lost 31.4 percent over the past two weeks, while Samsung Electronics lost 20.6 percent.

“The companies with bigger global exposure and those more sensitive to economic conditions are struggling more,” said Song In-chan, an analyst for Shinhan Investment Corp.

These companies are also more vulnerable to foreign buying, and consequently became a target of foreign selling during the latest bearish streak, experts said.

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