Korea, Japan Interdependent in Many Sectors
A recent survey has revealed that 34 South Korean listed companies have Japanese shareholders with a stake of more than 5 percent. Most of them are component suppliers in the electronics and auto industries which are the two pillars of the South Korean economy.
Thirty four out of some 2,000 companies listed on Korea Exchange (KRX) had Japanese shareholders with stakes of at least 5 percent, according to data released by the Korea CXO Institute on July 9. Among them, 16 were Kospi-listed firms and 18 were listed on the Kosdaq. The value of the stocks held by Japanese investors was estimated at 1.82 trillion won (US$1.54 billion) as of July 3.
Japanese shareholders’ stakes exceeded 50 percent in five firms, ranged from 20 percent to 49 percent in seven companies and from 11 percent to 19 percent in 13 firms, and fell short of 10 percent in nine firms. The most noteworthy shareholder was NTT DoCoMo, which currently owns a 5.46 percent stake in KT, a Korean mobile phone carrier. The stocks held by the Japanese telecom operator were worth 401.3 billion won (US$339.80 million).
Tokai Carbon, the largest shareholder of TCK which produces high-purity graphite materials for semiconductor manufacturing equipment, came second with a 44.4 percent stake worth 305.80 billion won (US$258.89 million). SBI Holdings, the largest shareholder of fintech firm SBI FinTech Solutions was third with a 72.4 percent stake worth 285.70 billion won (US$241.85 million).
By industry, most of the listed firms were electronics and auto parts suppliers. Japanese shareholders had over 5 percent stakes in Saeron Automotive and SL in the auto component industry and MOA Telecom and Micro Contact Solution in the electronics industry, respectively. For the semiconductor industry, Tokyo Electron had a 13.8 percent stake in Hana Micron. For unlisted companies, Kyungshin, Denso Korea and Koyo Jico Korea in the auto parts industry had Japanese shareholders with over 50 percent stakes as well as Hirose Korea, Korea Gyeongnam Taiyo Yuden and Korea Taiyo Yuden in the electronics component industry.
The institute said, “South Korean and Japanese companies create synergy by complementing each other’s technology, capital and workforce in many sectors. In particular, the electronics and automotive industries need many components and materials. Therefore, they have a high level of interconnection and the relevant industries at the two countries can be paralyzed in the end if either one uses specific components and materials as a weapon.”