THAAD deployment decision sends S. Korean Shares in dive

S. Korean shares fall on THAAD deployment decision


South Korean shares ended in negative territory on Friday, extending earlier losses after military authorities of Seoul and Washington announced its decision to deploy the U.S. missile defense system, called Terminal High Altitude Area Defense (THAAD), on the South Korean soil.

THAADThe benchmark Korea Composite Stock Price Index (KOSPI) declined 10.98 points, or 0.56 percent, to settle at 1,963.10. Trading volume stood at 345.92 million shares worth 4.07 trillion won (3.51 billion U.S. dollars).

The index started off a weak start with a 0.09 percent fall amid lingering concerns about Brexit, or British referendum to leave the European Union (EU). Investors refrained from taking active positions ahead of the announcement of the June employment data in the United States on Friday night.

The KOSPI extended its initial losses as South Korea and the U.S. jointly made an official announcement to deploy the THAAD in the U.S. Forces Korea (USFK) by the end of next year.

Following the announcement, shares of South Korean companies, which depend heavily on Chinese consumers and travelers for revenue, fell sharply. LG Household & Health Care tumbled 4.5 percent, with leading cosmetics maker Amore Pacific plunging 4.7 percent. Travel agency shares, including Hanatour Service and Modetour Network, also lost ground.

Cheong Seong-chang, a senior researcher at the private Sejong Institute, said on the phone that the THAAD decision would cause a drop in Chinese tourists visiting South Korea, a cooling in the popularity of the so-called Korean Wave and the possible boycotting of South Korean products in China.

Institutional investors dumped a net 286 billion won worth of shares, leading the KOSPI slide. Foreign and retail investors bought shares worth 41 billion won and 200 billion won respectively.
Market bellwether Samsung Electronics gained 0.7 percent, after advancing 2 percent in the previous day when it announced the preliminary figure for the second-quarter earnings that unexpectedly exceeded market expectations.

Excluding Samsung Electronics, losers outnumbered winners among large-cap stocks.

The local currency depreciated versus the U.S. dollar on growing geopolitical risks on the peninsula, caused by the THAAD decision. South Korea’s currency finished at 1,161.8 won against the greenback, down 7.2 won from Thursday’s close.

Bond prices ended lower. Yields on the liquid three-year treasury notes added 0.8 basis points to 1.216 percent, and returns on the benchmark 10-year government bonds rose 0.8 basis points to 1.388 percent. Enditem

Source: Xinhua/

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