Evaporated Monies
It has been found that a total of 26 trillion won (US$24.1 billion) in market capitalization has evaporated from the 92 listed subsidiaries of the 10 major business groups in Korea since the beginning of this year. Still, the Hanjin Group’s market cap has increased by over 10 percent, and those of the Hyundai Motor Group and the SK Group have gone up as well, although only slightly.
According to financial information provider FnGuide’s March 23 data, the total market cap of the 92 companies was 674.464 trillion won (US$625.778 billion) back on January 2, the first session of this year. However, it declined by 26.269 trillion won (US$24.378 billion) to 648.195 trillion won (US$601.524 billion) as of March 19. The Korea Composite Stock Price Index (KOSPI) fell over 4 percent from 2,011.34 points during the same period.
Only three out of the 10 major groups recorded a growth in market cap – Hanjin (10.51 percent), Hyundai Motor (2.32 percent), and SK (1.02 percent). The market capitalization of the other seven decreased by 17.76 percent for Hyundai Heavy Industries Group, 16.61 percent for Hanwha Group, 8.02 percent for LG, 6.21 percent for GS, and 3.93 percent for Samsung.
Specifically, the five listed subsidiaries of the Hanjin Group increased from 3.3018 trillion won (US$3.0640 billion) to 3.6488 trillion won (US$3.3860 billion) during the period. Aircraft fuel prices dropped 6.1 percent from a year earlier to increase the stock price and market cap of Korean Air by 20 percent and 354.9 billion won (US$329.3 million), respectively. Still, the stock price of Hanjin Shipping, another one of the major subsidiaries, declined 15.27 percent during the period, so the total market cap fell from 945.4 billion won (US$877.3 million) to 801.1 billion won (US$743.4 million).
Hyundai Motor Company recorded a 2.9 percent increase in stock price thanks to its new models such as the LF Sonata, and Kia Motors posted an 8.35 percent increase as well with its electric vehicles. However, Hyundai Hysco was re-listed after the spin-off on January 24, to increase the market cap of the entire group by at least 60%. The growth of the combined market capitalization of the 10 subsidiaries was limited to 2.32 percent, or 2.9863 trillion won (US$2.7712 billion).
SK Innovation (10.71 percent below zero) and SK Telecom (5.48 percent below zero) were the sticking points for the SK Group. Although SK Networks and SK Chemical boosted their stock prices by 26.76 percent and 20.86 percent each, the poor performance of the two major subsidiaries resulted in just a 1.02 percent, or 809.2 billion won (US$750.8 million), increase in the combined market cap of the 17 listed subsidiaries.
Meanwhile, the Hyundai Heavy Industries group’s aggregate market value has plummeted 17.76 percent, or 4.1943 trillion won (US$3.8923 billion), since the first session of 2014. Key affiliates like Hyundai Heavy Industries and Hyundai Mipo Dockyard showed very sluggish performance in the last quarter of 2013. Besides, things remain unfavorable for them in the second quarter of this year, too.
Lotte Group’s aggregate value plunged 16.61 percent from 28.4159 trillion won (US$26.3700 billion) to 23.6967 trillion won (US$21.9905 billion). Six out of the 8 subsidiaries had to witness their share prices fall. Likewise, the Hanwha Group lost 1.0751 billion won (US$997,692) (negative 8.17 percent) with the share prices of Hanwha Life Insurance, Hanwha, and Hanwha Chemical dropping by 8.36 percent, 16.15 percent, and 3.8 percent, respectively.
POSCO Group’s market cap slid 8.88 percent from 35.3839 trillion won (US$32.8362 billion) to 32.2401 trillion won (US$29.9188 billion) due to the slump in the global steel industry. Those of LG and GS plummeted from 68.0871 trillion won (US$63.1848 billion) to 62.6263 trillion won (US$58.1172 billion), and from 11.3055 trillion won (US$10.4915 billion) to 10.6037 trillion won (US$9.8402 billion) each.
In the meantime, 11 out of the Samsung Group’s 17 listed subsidiaries posted a falling stock price during the same period to drag down the combined market cap from 283.0542 trillion won (US$262.6743 billion) to 272.9376 trillion won (US$253.2861 billion). Samsung Electronics lost 5.8919 trillion won (US$5.4677 billion, 3.06 percent), followed by Cheil Worldwide (14.07 percent), Samsung Securities (17.69 percent), Samsung Heavy Industries (19.19 percent), and Cheil Industries (24.47 percent).