South Korean shares slide on worries about shipbuilders

GMT 23:18 2015 Friday ,17 July

Arab Today, arab today South Korean shares slide on worries about shipbuilders

South Korean shares
Seoul - XINHUA

South Korean shares lost ground Friday as worries spread about local shipbuilders after news that Daewoo Shipbuilding & Marine Engineering (DSME) could record as much as 3 trillion won (2.6 billion U.S. dollars) of operating losses in the second quarter.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 11.10 points, or 0.53 percent, to 2,076.79 at the close. Trading volume stood at 806.12 million shares worth 8.32 trillion won (7.25 billion U.S. dollars).

The DSME, the world's third-largest shipbuilder, was estimated to have posted a couple of billion dollars of losses in the second quarter as the shipyard was forced to belatedly book losses from offshore plant orders, which had been dismissed by former executives to gain support from shareholders.

The news was unveiled ahead of the second-quarter earnings season, boosting concerns about widespread losses among shipbuilders. DSME shares fell 2.4 percent, and Samsung Heavy Industries tumbled 12.4 percent. Hyundai Heavy Industries declined 6.3 percent, and its affiliate Hyundai Mipo Dockyard retreated 5.2 percent.

Cheil Industries and Samsung C&T, two major affiliates of Samsung Group, won approval from shareholders for a merger plan to create the group's de-facto holding company in September, but Samsung shares lost ground as the approval was already priced in.

Cheil Industries plunged 7.7 percent, and Samsung C&T tumbled 10.4 percent. Samsung Life Insurance declined 2.8 percent, but Samsung Electronics gained 1.8 percent.

Foreign and institutional investors dumped stocks worth 102 billion won and 275 billion won respectively. Retail investors bought a net 367 billion won worth of shares, limiting the KOSPI' s further decline.

The state-run power supplier Korea Electric Power Corp. added 0. 3 percent, and memory chip giant SK Hynix rose 1.3 percent. Leading cosmetics maker Amore Pacific gained 1 percent, and the most-used search engine Naver advanced 4.1 percent.

The South Korean currency finished at 1,147.5 won against the greenback, up 1.7 won from Thursday's close.

Bond prices ended higher. Yields on the liquid three-year treasury notes slid 0.5 basis points to 1.784 percent, and the return on the benchmark 10-year government bonds lost 1.1 basis points to 2.470 percent.

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