Amid Heat Wave
Korea Electric Power Corporation (KEPCO) lost more than 1.8 trillion won (US$1.6 billion) in market capitalization just in five trading days. This is largely due to a series of bad news, such as the government's planned cut in electricity bills over a blistering heat wave and the loss of its preferred bidder status to buy Toshiba's NuGen nuclear project in Britain.
The price of KEPCO shares closed at 30,450 won (US$27.13) on the main KOSPI bourse on August 7, down 1.93 percent from the previous trading day. The figure decreased 8.37 percent from 33,000 won (US$29.40) of the closing price at the end of July.
Accordingly, the market capitalization of KEPCO fell 1.83 trillion won (US$1.63 billion) from 21.38 trillion won (US$19.04 billion) to 19.55 trillion won (US$17.41 billion) just in five trading days.
The biggest cause of the drop in KEPCO stock prices is the government’s plan to temporarily cut the energy bills as part of efforts to ease burdens for the public suffering from a scorching heat wave. The ruling Democratic Party and the Ministry of Trade, Industry and Energy have decided to temporarily adjust the charges for residential electricity in the nation by expanding the power usage levels for the two lowest pricing tiers.The government will push up the maximum amount of consumption for the first and second stages by 100 kilowatt hours each. It said that the total amount of electricity bill reduction will reach 276.1 billion won (US$245.97 million).