Seoul: Stocks slump to near 23-month low, bond yields down

[SEOUL] South Korea's Kospi stock index fell 1.5 per cent on Monday, extending its decline into a fifth session and hitting its lowest in almost 23 months, on continued selling by foreign and local investors. Bond yields fell after the central bank chief's comments on monetary policy, while the won was steady against the dollar.

The Kospi closed down 31.10 points, or 1.53 per cent, at 1,996.05. The main index may fall to 1,900 level within November, said Noh Dong-kil, an economist with Shinhan Investment.

The Financial Services Commission (FSC) said it will quicken the implementation of funds worth of 300 billion won (S$362.9 million) with the goal of capital market stabilisation. The fund will start investment in the junior Kosdaq stock market from early November, said FSC vice-chairman Kim Yong-beom.

The measure, however, failed to boost investor sentiment. The Kosdaq stock index finished 5 per cent lower, hitting the lowest since August 2017.

Shares of Hyundai Wia Corp, an affiliate of Hyundai Motor, fell 11.1 per cent after the car parts maker said third-quarter operating profit slumped 36.2 per cent from a year earlier.

Samsung Engineering jumped 6.2 per cent after the company posted a huge gain in its third-quarter operating profit.

Bank of Korea chief Lee Ju-yeol said the rate decision should consider downside pressures on the economy, noting that "rate hike is not a done deal". After the remark, Seoul's three-year treasury bond futures rose as much as 0.27 point.

South Korean exports are likely to post double-digit growth in October, mainly due to more working days, but the underlying trend is weakening as Sino-U.S. trade war intensifies, a Reuters poll found.

The won was quoted at 1,141.4 per dollar on the onshore settlement platform, 0.04 per cent firmer than its previous close at 1,141.9. In offshore trading, the won was quoted at 1,141.01 per US dollar, down 0.15 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,122.35 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.02 per cent, after U.S. stocks ended the previous session with mild losses. Japanese stocks weakened 0.16 per cent. The Kospi is down around 17.8 per cent so far this year, and down by 11.15 per cent in the previous 30 days.

The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won. The trading volume during the session on the Kospi index was 416,016,000 shares and, of the total traded issues of 898, the number of advancing shares was 67.

Foreigners were net sellers of 159,519 million won worth of shares. The US dollar has risen 7 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2, 2018 and low is 1,146.26 on Oct 11, 2018. In money and debt markets, December futures on three-year treasury bonds rose 0.22 point to 108.88.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.7 per cent, while the benchmark three-year Korean treasury bond yielded 1.905 per cent, lower than the previous day's 1.96 per cent.

REUTERS