The Business Times

Seoul: Won, stocks weaker on Samsung chief's arrest

Published Fri, Feb 17, 2017 · 02:51 AM

[SEOUL] The South Korean won edged down early on Friday as markets turned more jittery after Samsung Group leader Jay Y Lee was arrested over his alleged role in a corruption scandal that has engulfed President Park Geun-hye.

The won stood at 1,144.6 against the US dollar as of 0211 GMT, down 0.3 per cent compared with Thursday's close of 1,141.5.

Lee's arrest is hurting overall market sentiment as some investors see this potentially affecting other conglomerates as the probe unfolds, according to Kim Doo-un, a foreign exchange analyst at Hana Futures.

"What's important for the won's movement now is whether the market participants regard Lee's arrest as a start of a crisis for other conglomerates or just as one part of this huge political scandal," said Mr Kim.

South Korean shares also weakened following Lee's arrest as Samsung Group shares declined and foreign investors sold local equities.

The Korea Composite Stock Price Index (Kospi) was down 0.2 per cent at 2,078.59 points.

Samsung Electronics Co Ltd fell as much as 1.8 per cent while Samsung C&T Corp dropped nearly 4 per cent.

Meanwhile, Hotel Shilla Co Ltd, headed by Lee Boo-jin the sister of Jay Y Lee, jumped as much as 8.2 per cent immediately after opening, its biggest daily gain since August 2015. Some analysts expect Lee to play a bigger role in the group if there is a significant leadership vacuum.

Foreign investors were poised to be net sellers, offloading 92.8 billion won (S$115.6 million) worth of Kospi shares near mid-session, weighing on the index.

Decliners outnumbered advancers 404 to 361.

March futures on three-year treasury bonds shed 0.01 point to 109.55.


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