Bio companies suffer as Seoul stocks fall

Home > Business > Industry

print dictionary print

Bio companies suffer as Seoul stocks fall

테스트

A signboard at KEB-Hana Bank’s currency dealing room in Jung District, central Seoul, shows the benchmark Kospi falling 55.61 points, or 2.57 percent, to end at 2,106.1 on Tuesday, the lowest this year. [YONHAP]

Korean stock markets had a difficult day on Tuesday as rising interest rates and a slowdown in the global economy dampened investor sentiment.

The main Kospi plunged 2.57 percent to close at 2,106.1, the lowest close in one year and seven months, while the Kosdaq also fell 3.38 percent to 719.

U.S. President Donald Trump’s hardline remarks against Russia and China added to existing fears of monetary tightening by the Fed and tepid growth in global trade. Trump said on Monday that the U.S. will bolster its nuclear arsenal after he threatened to pull out of a nuclear treaty with Russia.

“Trump’s strong commitment to imposing tariffs on China and the withdrawal from the Intermediate-Range Nuclear Forces (INF) triggered fears across the emerging markets,” said Kim Byung-yeon, an analyst at NH Investment & Securities.

Still, Kim said that the fears appear excessive and that the markets will likely recover once bulk offloading by foreign and institutional investors in recent days and lower demand comes to an end.

Lee Eun-taek, an analyst at KB Securities, had a more cautious outlook, saying that the Korean market will face challenges in rebounding.

“Investors’ attention goes toward prolonged trade tension between the United States and China and whether the U.S. markets will continue to experience correction,” Lee said, “We expect the U.S. markets will face a further correction of 5 percent.”

Among the companies hit hardest by the latest selling spree is Celltrion, a Kospi-listed biopharmaceutical company.

Celltrion fell 8.19 percent to 246,500 won ($217) on Tuesday after Temasek sold off 900 billion won worth ($792 million) of shares, or 2.9 percent of its holdings, in a block deal last night. This is the second time this year that the Singaporean fund has floated Celltrion shares after selling off an equal size of 1.1 trillion won worth of stake in March.

But even after the large-scale sale, Temasek will remain Celltrion’s major shareholder with a 9.6 percent stake.

Still, analysts worry that the offloading could impact the country’s broader bio stocks as Celltrion is considered a leading biopharmaceutical unit.

Other bio companies suffered steep drops, with Samsung BioLogics, Celltrion Healthcare and SillaJen falling more than 7 percent.

The move came as leading bio companies reported worse than expected earnings for the third quarter.

Samsung BioLogics posted a disappointing record on Tuesday, due mainly to capacity issues at the company’s production lines.

Its operating profit fell 49 percent to 10.4 billion won in the third quarter from 20.4 billion won a year ago, while revenue fell 21 percent to 101 billion won from 127.4 billion won during the same period.

Major tech companies like Samsung Electronics and SK Hynix also saw a decline of more than one percent, affected by a dim industry outlook.

Analysts have warned that the two companies’ performances are going to suffer due to the oversupply of semiconductors starting in the fourth quarter.


BY PARK EUN-JEE [park.eunjee@joongang.co.kr]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)