Local shares mirroring U.S. peers

It’s well known in the investing world that the performance of a leading company tends to influence the share prices of other firms in the same sector within the same country.

Take, for instance, the “Intel effect,” which refers to U.S. chip giant Intel’s immense influence on the information and technology segment of the market in the United States.

But the ripple effect can extend beyond borders as well, contributing to the performance of Korean stocks.

On that end, the correlation between Korean and U.S. stocks has become even closer over the past year as the world unites in efforts to drive a stake through the heart of the financial crisis that rocked economies worldwide.

According to data provided yesterday by Daishin Securities, the ties binding local stocks on the Kospi index in certain sectors such as IT, auto and finance with their counterparts in the U.S. are growing stronger.

Stock of Samsung Electronics, in particular, is more closely mirroring the performance of U.S. heavyweights such as Intel, Apple and Microsoft, experts said.

Between January 2009 and April of this year, Samsung Electronics’ share price nearly doubled, jumping from 451,000 won ($408.60) to 841,000 won. In the same period, the share price of Intel rocketed from $14.55 to $23.99 (65 percent), while Microsoft rose from $19.44 to $31.39 (62 percent). Apple’s share price tripled from $85.35 to $266.47 owing to a sharp spike in sales of its iPhone product in the same period.

Local leading stocks in the auto and financial sectors also closely tracked U.S. stocks in the same industries during the period. Hyundai Motor’s share price tripled from 39,500 won to 125,500 won, while U.S. automaker Ford skyrocketed sixfold from $2.29 to $14.20.

“Hyundai Motor’s share price is usually sensitive to the company’s U.S. market share, and the automaker has been continuously raising its standing in the U.S. market,” said Kim Byeong-kuk, an analyst with Daishin Securities.

In the financial sector, Korea’s KB Financial Group mirrored JP Morgan of the U.S. KB’s share price soared from 32,940 won to 55,300 won (68 percent), while JP Morgan rose from $31.53 to $44.74 (42 percent) in the same period.

“Since the collapse of Lehman Brothers, a coupling trend [of stocks in the financial sector between the Kospi and Dow Jones] has become deeper on the back of cooperation between global economies and financial regulations,” said Im Il-sung, a researcher with Shinyoung Securities.

By Jung Jae-yoon [jyj222@joongang.co.kr]