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Biggest Losers From China's Economic Sanctions Against South Korea -- Barron's Blog

6 Mar 2017 1:45 am

By Shuli Ren

South Korean consumer stocks resumed their sell-off on Monday as political tensions with China escalated.

Over the weekend, China's fire authorities suspended the operation of Lotte Mart in China's northeastern city of Dandong, the latest pressure on South Korea's retail giant. Lotte had agreed to give its land property to the Korean government for the installation of U.S.-backed missile defense system, which China objects to.

This morning, North Korea fired several ballistic missiles into the sea of Japan, further escalating regional political tension.

This morning, Amorepacific (090430.Korea) slipped 2.8%, Hotel Shilla (008770.Korea) dropped 3.2%.

So far, the sell-off seen has been restricted to tourism consumer stocks, such as cosmetics, duty-free shops and casinos. But is it possible that China's sanctions would spread to other sectors?

CLSA kindly provided us with a list of Korean companies with large sales exposure to the China market. At the top of the rank is LG Display (034220.Korea), which relies on China for almost 70% of its total sales. Orion (001800.Korea) follows with about 60% sales exposure to China. (See chart)
 More at Barron's Asia Stocks to Watch blog, http://blogs.barrons.com/asiastocks/ 

(END) Dow Jones Newswires

March 05, 2017 20:45 ET (01:45 GMT)

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