Seoul shares declined on Tuesday with losses led by Kumho Asiana Group shares including Kumho Tire amid renewed liquidity worries, while the ex-dividend effect dented markets further. The Korea Composite Stock Price Index (KOSPI) finished down 0.78 percent at 1,672.48 points.
"Kumho Asiana Group issues are under pressure amid fresh negative reports about Kumho Tire, fuelling liquidity worries," said Kim Joon-kie, a market analyst at SK Securities, adding that there were concerns about how the group would meet financial obligations to investors linked to its Daewoo Engineering & Construction buyout.
"In addition, with ex-dividend falling today, shares are under pressure as dividend-targeted plays have neared an end," Kim added. After companies go ex-dividend, investors no longer qualify for the nearest dividend payout. The ex-dividend impact shaved an estimated 17.58 points off the main KOSPI index at the open, according to a statement from the Korea Exchange.
Listed companies that close their financial years in December went ex-dividend on Tuesday, the exchange said. Steep losses in Kumho Asiana Group related issues hurt broader markets following local media reports Kumho Tire failed to give employees their December paychecks amid cash flow problems.
Kumho Tire officials could not be reached for comment. Kumho Tire tumbled 12.67 percent and Kumho Industrial, a key unit of the group, shed 6.76 percent. Banks also came under pressure amid concerns about their exposure to Kumho Asiana Group and its Daewoo E&C investment.
KB Financial Group, holding firm of South Korea's No 1 Kookmin Bank, retreated 1.33 percent and Shinhan Financial Group lost 2.56 percent. Telecommunications issues, which tend to pay out heavy dividends, also ended lower. "Fundamentally the telco sector has been seeing positive newsflows, such as KT's early retirement plans," said Stan Jung, an analyst at Woori Investment & Securities.
KT, South Korea's dominant fixed-line operator and No 2 mobile carrier, said on Monday that about 16 percent of its workforce would leave under an early retirement programme. Shares in SK Telecom lost 3.95 percent and KT retreated 2.95 percent. Retail investors bought a net 127 billion won ($108.7 million) worth of shares. Institutions were sellers of a net 231.1 billion won worth of stocks and foreign investors were buyers of a net 98.6 billion won.
Decliners outnumbered advancers 530 to 263, with 73 issues ending flat. The KOSPI 200 March futures index rose 0.95 points to 221.75, and the KOSPI 200 spot index fell 1.69 points to 220.34. The junior Kosdaq market lost 0.09 percent to close at 505.61.
Comments
Comments are closed.