Seoul stocks end 0.78 pct lower on Kumho liquidity woes, dividends

SEOUL, Dec. 29 (Yonhap) -- South Korean stocks closed 0.78 percent lower Tuesday
amid liquidity concerns at local conglomerate Kumho Asiana Group and dividend
payments, analysts said. The local currency lost ground against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) decreased 13.11 points to
end at 1,672.48, retreating from a three-month high set on Monday. Volume was
moderate at 312.3 million shares worth 4.25 trillion won (US$3.6 billion) with
losers outpacing gainers 530 to 263.
"The KOSPI took a beating from liquidity woes at Kumho Asiana Group, although the
market recovered some of its losses in the closing session because the issue had
already become widely known," said Kwak Joon-bo, an analyst at Hana Daetoo
Securities. "The market loss also came after stocks shed rights to dividends."
The last day that buyers were entitled to claim stock dividends was on Monday.
Shares of the family-controlled Kumho Asiana Group plummeted as a local credit
appraiser cut the rating for unsecured corporate bonds of Kumho Industrial, the
group's building unit, by one notch to BBB-. The credit rater cited potential
losses from the liquidity-squeezed group's sale of Daewoo Engineering &
Construction. Other affiliates were placed on a watch list for potential
downgrades.
Shares of Kumho Industrial fell 6.76 percent to 9,790 won, while shares of Kumho
Tire, the country's second-largest tire maker, dived 12.67 percent to 4,240 won.
Asiana Airlines slid 5.66 percent to settle at 3,915 won.
Banks also finished sharply lower on fears that the liquidity woes could weigh
down on lenders with exposure to Kumho group.
South Korea's second-largest financial firm Woori Finance Holdings slid 5.86
percent to 14,450 won and No. 3 player Shinhan Financial Group shed 2.56 percent
to end at 43,800 won.
KT fell 2.95 percent to 39,500 won on concerns that the telephone giant's plan to
eliminate a 16 percent workforce may erode earnings due to massive compensation
charges.
The local currency closed at 1,171.20 won to the U.S. dollar, down 1 won from
Monday's close. The currency remained near a two-week high after the Bank of
Korea announced in the morning that the country posted a $4.28 billion current
account surplus in November, dealers said.
pbr@yna.co.kr
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