Money Evaporation
The combined aggregate market value of the listed subsidiaries of the 10 major business groups in Korea has dropped by 32.5353 trillion won (US$30.8819 billion) since the beginning of this year. In particular, the decrement reached approximately 20 trillion won (US$18.9 billion) between July and September.
According to financial information provider FnGuide, the 89 companies’ market cap fell from 690.9011 trillion won to 658.3658 trillion won (US$654.1313 to 624.5456 billion) between January 1 and September 27.
As of the end of June, the value was 677.9006 trillion won (US$641.8227 billion), 1.88 percent down compared to the first trading session of 2014. However, the rapid drop in the market cap of the Samsung and Hyundai Motor Groups in the third quarter caused the decrement to expand to 4.71 percent.
The Samsung Group’s market capitalization dropped by 16.6661 trillion won (US$15.8191 billion) between the end of June and September 27, and the amounts were 10.0294 trillion won (US$9.5222 billion) and 3.1966 trillion won (US$3.0324 billion) for Hyundai Motor and Hyundai Heavy Industries, respectively. In contrast, the SK Group, LG Group, and POSCO increased their values by 4.7829 trillion won (US$4.5283 billion), 2.4689 trillion won (US$2.3440 billion), and 2.1306 trillion won (US$2.0229 billion) each. The increments were 637.8 billion won (US$605.0 million) for Lotte, 387.4 billion won (US$367.7 million) for Hanwha, 120.3 billion won (US$113.9 million) for GS, and 94.4 billion won (US$89.6 million) for Hanjin.
The rapid decline in the Samsung and Hyundai Motor Groups can be attributed to Samsung Electronics and Hyundai Motor Company. The stock prices of both companies plummeted in the third quarter, and the two groups had to lose a total of 27 trillion won (US$25.6 billion) during the three months alone.
Specifically, Samsung Electronics’ market cap declined from 202.0946 trillion won (US$191.7130 billion) to 197.823 trillion won (US$187.760 billion) in the first quarter, and then to 194.7297 trillion won (US$184.8335 billion) by the end of June. The current amount is 174.5497 trillion won (US$165.5831 billion). That of Hyundai Motor Company plunged from 50.5534 trillion won (US$47.8629 billion) to 41.1917 trillion won (US$39.1086 billion) in the third quarter.
Meanwhile, SK C&C led a surge in the aggregate market value of the SK Group as a whole. SK C&C, which is the holding company of the group, gained no less than 50.15 percent in market cap in the third quarter.
“Chairman Lee Kun-hee’s hospitalization since May and the negative prediction about the electronics manufacturer’s operating profits for the second half of 2014 are worsening the situation for Samsung, while the recent land purchase of the Hyundai Motor Group is accelerating its stock price decline,” said an industry source, continuing, “However, rumors about merger with SK C&C are having a positive impact on SK’s share price.”