GMKT PKX SHG WF | 18.86 127.70 122.75 70.81 | -0.42 +3.60 -0.25 -0.42 |
Won's Appreciation Seen As Threat to South Korea's Export-Driven Economy
Of the 14 American depositary shares of Korean companies tracked by The Bank of New York, seven moved lower in Monday afternoon trading while six moved higher. One was unchanged.
The Bank of New York's Korea ADR index declined 0.8 percent to 325.42.
The Seoul Composite index was unchanged at 1,716.56.
An article in The Wall Street Journal Monday reported that the South Korean won has risen 10 percent against the U.S. dollar since 2005, more than any other Asian currency. This has caused Korean companies to lose price advantages to foreign competitors, thereby cutting into profits, according to the article.
The won currently trades at $1.07 for 1,000 won.
John Chambers, managing director at Standard & Poor's, views the won's appreciation as beneficial to the Korean economy in the long term.
"Some Asian countries try to keep their currencies at artificially low levels to make it easier for exporting," Chambers said. "It engenders greater wealth through the economy if you have a currency decided by market forces."
He added that the South Korean government is unlikely to intervene in the currency in the short term since the country is running a significant current account surplus.
The day's big decliner was steel company Posco, which fell $3.32, or 2.7 percent, to $121.25.
Shinhan Financial Group Co. dropped $1.95, or 1.6 percent, to $124.03.
Gmarket Inc., a retail e-commerce marketplace, declined 21 cents, to 1.1 percent, to $19.
Woori Finance Holdings Co. shed 47 cents to $71.84.
Links: Korean ADRs - Detail Quotes
from: Yahoo! Finance News
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