Boycott of Japanese Products Wipes W17 Trillion from KOSPI

  • By Yoon Hyung-jun

    July 29, 2019 12:12

    A growing Korean boycott of Japanese products after the island country slapped export restrictions of vital materials is starting to hurt Japanese firms' Korean partners.

    One is the Japanese fast-fashion brand Uniqlo, which is owned 51-49 by Japan's Fast Retailing and Korea's Lotte Shopping and operates around 180 stores here.

    Lotte Shopping's total market capitalization dropped W481 billion or 10.6 percent over the past month (US$1=W1,185). Korean-Japanese parent Lotte Group, which operates many joint ventures with Japan, saw its market cap decline by W2.42 trillion or 9.9 percent to W21.95 trillion.

    According to conglomerate tracker Chaebul.com on Sunday, the total market cap of 95 listed subsidiaries of Korea's top 10 conglomerates fell from W852.3 trillion in late June to W835 trillion on Friday. In other words, their market cap declined by more than W17 trillion in the month since Japan imposed export restrictions on Korea.

    LG Group's market cap dropped 7.2 percent from W93.3 trillion to W86.6 trillion. Affiliate LG Chem's declined by more than W1.5 trillion, because its battery business relies heavily on part imports from Japan. Lotte Chemical also saw its market cap decline by W583 billion, and Hanwha Chemical by W549 billion.

    But SK Group, which owns a chipmaker whose part imports Japan has begun to restrict, saw its market cap rise 6.6 percent from W111.4 trillion to W118.7 trillion.

    Ironically, semiconductor prices are recovering amid concerns over a supply shortage as Japan's export curbs bite, resulting in SK Hynix's market cap soaring 14.8 percent to W7.5 trillion.

    Rival chipmaker Samsung Electronics' market cap also increased by almost W1 trillion. But analysts said the growth is a temporary and could flip rapidly if the export curbs drag on.

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