Korean Stocks Plunge, Won Slides After Ford Scraps Daewoo Bid
Seoul, Sept. 18 (Bloomberg) -- Korea's key stock index plunged to an 18-month low and the won slid as Ford Motor Co.'s decision to scrap its bid for Daewoo Motor Co. fueled concern the bankrupt automaker's local creditors won't see their money anytime soon.
The Kospi index tumbled 5.4 percent to 594.27, falling below 600 points for the first time since March 1999, as the won fell for a fourth day, slipping 0.2 percent to 1,120.05 against the U.S. dollar.
An index that tracks Korean banks fell even more, sliding 11.3 percent to 106.97. The Kosdaq fell 6.84, or 6.9 percent, to 92.41, making the over-the-counter index the worst performing in the world's major stock markets.
``Falling below 600 points is shocking,'' said Shim Sam Chan, a strategist at Hana Securities Co. in Seoul. ``The Daewoo Motor- Ford fallout hit investors hard. Investors are concerned about additional losses and delays in bank reform after Ford's dropout.''
The following is a list of companies whose shares are active. The stock symbol is in parentheses after the company name.
Creditors of Daewoo Motor Co. such as Chohung Bank (0001 KS less thanEquity>) and Hanvit Bank (0003 KS less thanEquity>) fell as investors expressed concern that Ford's pull-out from a $7 billion bid for Daewoo Motor Co. could delay government plans to reorganize the financial industry. The creditor banks plan to provide a further 300 billion won ($267 million) to the automaker, local news agency MoneyToday reported. Korea Economic Daily also reported Korea Deposit Insurance Corp. borrowed 17.7 trillion won from local financial institutions so far this year because it has used up all 43.5 trillion won raised from bond issues under government guarantees. Chohung shed 380 won, or 11 percent, to 3,000, and Hanvit fell 190 won, or 11 percent, to 1,580. Kookmin Bank (2313 KS less thanEquity>), Korea's largest commercial lender, fell 1,950 won, or 14 percent, to 12,150 and KorAm Bank (1683 KS less thanEquity>) fell 640 won, or 11 percent, to 5,050.
Chipmakers fell on concerns that demand for their products will not exceed production capacity. The spot price for the industry-standard 64 Megabit dynamic random access memory chips fell to a fresh three-month low to $7.23 on Friday, sliding 19 percent from mid-July. ``Investors were expecting to see chip demand rise starting in September,'' said Lee Jong Weon, a fund manager at Korea Investment Trust Management Co., which manages 800 billion won ($715 million). ``Semiconductor shares are like falling knives that no one is willing to grab.'' Samsung Electronics Co. (0593 KS less thanEquity>), the world's largest computer memory chipmaker, fell 18,500 won, or 8.5 percent, to 199,000, the lowest since end-October, 1999. Hyundai Electronics Industries Co. (0066 KS less thanEquity>), the second-largest memory chipmaker, fell 1,550 won, or 9.4 percent, to 15,000, the lowest in nearly four months.
Daewoong Pharmaceutical Co. (0309 KS less thanEquity>) shed 230 won, or 2.4 percent, to 9,190 after Maeil Business Newspaper said the drugmaker expects its operating profit to double to 15 billion won for the first half of the fiscal year, which began in April.
LG Electronics Inc. (0261 KS less thanEquity>) fell 2,350 won, or 8.4 percent, to 25,800 after Maeil Business Newspaper said the debt- equity ratio at Korea's No. 2 maker of electronic appliance and parts rose to 291 percent from 172 percent after the merger with affiliate LG Information & Communications Ltd., citing a LG Electronics' report submitted to the Financial Supervisory Commission.
Kosdaq shares:
Korea Hinet Co. (4018 KS less thanEquity>) fell by its daily 12 percent limit to 3,070 won after the provider of packaged software for enterprises said it will spend 870 million won to buy back its own shares to stabilize the stock prices.
Jusung Engineering Co. (3693 KS less thanEquity>) fell by its daily 12 percent limit to 9,500 won after the Korea Economic Daily reported the semiconductor equipment maker may scrap its planned merger with Apex Co. in December. Instead, Jusung is planning to purchase only Apex's chemical vapor deposition division to reduce the acquisition costs.
Sep/17/2000 20:54 ET
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