Friday, February 28, 2020
Market Cap Gap Widens between Korean Companies and Their Foreign Rivals
Most Korean Firms Suffer Decline in Market Value
Market Cap Gap Widens between Korean Companies and Their Foreign Rivals
  • By Yoon Young-sil
  • January 2, 2020, 10:16
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The market capitalization gap between Korean conglomerates and their foreign rivals has widened.

The market capitalization gap between Korean conglomerates and their global competitors has widened.

Samsung Electronics’ market capitalization reached US$284.5 billion on Dec, 31, up 37.6 percent (US$ 77.8 billion) from US$206.7 billion at the end of 2018. Apple's market cap, on the other hand, jumped 73.7 percent from US$741.4 billion to US$1,288.1 billion over the same period. Samsung Electronics and SK Hynix gained sharply on the back of a Santa Claus rally, but it was not enough to catch up with Apple’s steep growth in December. The U.S. tech giant’s share price hit new all-time highs three times a week in the last month of the year. As a result, the market cap gap between Samsung Electronics and Apple widened from 3.6 times at the beginning of 2019 to 4.5 times.

Most of the world's major companies recorded an increase in their market cap. On the other hand, most Korean companies except some IT firms such as Samsung and Naver posted a decline in their market cap.

The market cap of Hyundai Motor (US$22.5 billion) shrank by US$200 million this year and represented only one tenth of that of Toyota (US$ 230.1 billion), which chalked up an increase of US$40.6 billion over the same period. SK Innovation’s market cap dropped by US$2.6 billion to US$12.3 billion, only about one 24th of ExxonMobil’s US$ 296.9 billion.

In addition, Korean retailer E-Mart's market cap slid by US$1.6 billion while global e-retailer Amazon recorded an increase of US$203.8 billion. Content producer Disney's market cap increased by US$102.9 billion, while that of Korean company Studio Dragon sank by US$400 million. These comparisons show that in many industrial sectors, the market cap of Korean companies fell significantly compared to their major foreign rivals.

Naver’s market cap (US$20.8 billion) rose more than 50 percent from the beginning of the year. It narrowed its market cap with Alphabet, the holding company of Google whose market value climbed 29.6 percent from US$724.3 billion at the end of 2018 to US$938.9 billion.