Danger Zone
Financial information provider WiseFn announced that 251 KOSPI-listed companies’ operating profit outlooks for the third quarter of this year decreased 6.61 percent from a quarter ago to 33.1774 trillion won (US$28.1049 billion). FnGuide also said that business performance outlooks provided by securities firms turned for the worse, compared to two months ago, for 47 out of the 92 largest KOSPI-listed companies in terms of market capitalization.
According to industry sources, Samsung Electronics’ operating profits for the third quarter were estimated to exceed 7 trillion won a couple of months ago, but the current market consensus is between 6.5 and 7 trillion won (US$5.5 and $5.9 billion). Likewise, three major Korean shipbuilders are predicted to record slightly over 60 billion won (US$50.8 million) in operating profits in the third quarter, instead of close to 80 billion won (US$67.8 million) as previously expected, and the average estimate of SK Innovation’s profits dropped from slightly less than 400 billion won (US$339 million) to less than 300 billion won (US$254 million) in just three months.
In the meantime, the Korea International Trade Association’s Export Business Sentiment Index (EBSI), which covers 602 Korean exporters on a scale of 0 to 200, reached 100.4 for the fourth quarter of 2015, which signifies that their export business is likely to be at a standstill in that quarter compared to Q3. Petroleum product exporters showed an EBSI of 113.6, but the others’ indices are much lower than that.
Under the circumstances, an increasing number of foreign investors are leaving the Korean stock market. According to the Korea Exchange, they net sold Korean stocks worth 40.1 billion won (US$34.1 million) between the beginning of this year and Sept. 25, when they showed the first net selling position in seven months.