Sun, Sep 28, 2003 - Page 10 News List

TAIEX sheds 1.9 percent; Nikkei and Kospi decline

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South Korean stocks fell, sending the Kospi index to its biggest weekly drop in five months.

Lenders including Kookmin Bank fell on concern rising overdue loans at their credit-card units will squeeze earnings.

"Optimism about the economic recovery at home, which boosted bank stocks, has faded," said Kim Hyung Chan, who helps manage the equivalent of US$1.1 billion at KTB Asset Management Co in Seoul. "There's no confidence about banks' earnings as we don't know how much they will reflect losses from their credit-card units."

He only owns Kookmin shares and doesn't plan to invest in other lenders.

The Kospi slid 2.3 percent to 697.40 at the 3pm close in Seoul. The index had its worst weekly decline since April 25, losing 6.8 percent. Shares of the nation's largest companies such as Samsung Electronics Co slid after the central bank said economic growth will be lower than its previous forecast.

Elsewhere in the region, Japan's Topix index rose for a second day in three Friday. Exporters such as Nissan Motor Co rallied after a US home sales report suggested consumer demand will rebound in their largest overseas market and the yen halted its advance against the dollar.

Oil refiners in South Korea including SK Corp and petrochemical makers such as Taiwan Styrene Monomer Corp (台苯) rose on optimism they will benefit from increased product prices after Idemitsu Kosan Co, Japan's second-biggest oil refiner, shuttered its Hokkaido plant after a fire caused by an earthquake.

Benchmarks in India and Thailand advanced, while stock indexes in Hong Kong, Malaysia, New Zealand and Singapore were little changed. All others declined.

Kookmin, South Korea's biggest bank, sank 5 percent to 37,700 won. Shinhan Financial Group Co, the nation's second-largest financial services group, lost 4.8 percent to 15,750 won.

Credit-card companies reported that overdue loans to customers rose for a second month to 11 percent of assets last month from a revised 10.9 percent in July, the Financial Supervisory Service said. The report may increase pressure on lenders to write off bad debts and shore up capital.

An investigation into Kookmin and its two executives over its sale of a stake in SK Securities Co by the Financial Supervisory Service, also led the stock lower. The regulator said the transaction may have been based on confidential information.

Samsung Electronics slumped 3.2 percent to 388,000 won. Hyundai Motor Co, South Korea's largest automaker, dropped 2.9 percent to 32,300 won.

Kospi 200 futures for December sank 2.4 percent to 89.50, while the underlying index slid 2.4 percent to 89.51.

The Topix gained 0.4 percent to 1021.06. Automakers, banks and computer-related shares were the three biggest contributors to the index's climb. For the week, the index dropped 4.6 percent, its biggest slide since Jan. 31.

Nissan, which based its earnings estimates on an ?120 average to the dollar, advanced 2.1 percent to ?1,221. Toyota Motor Corp, the world's third-largest automaker, added 0.9 percent to ?3,390. Sony Corp, which relies on the US for more than a quarter of its sales, rose 0.8 percent to ?4,000.

Sony is the maker of the PlayStation 2 video-game console.

For the week, the Nikkei 225 Stock Average lost 5.7 percent, its biggest drop since the week ended July 26, 2002. The measure was little changed at 10,318.44 Friday.

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