Seoul Shares Touch 3-week Low as China Worries Persist
Seoul shares fell in early domestic trade Wednesday, touching a near-three week low as persisting worries about China's economic growth outlook cut appetites for riskier assets. The Korea Composite Stock Price Index (KOSPI) was down 1.2 percent at 1,939.86 points as of 0215 GMT. The index earlier traded as low as 1,938.60, its weakest level since Feb. 20. A sharper-than-expected slowdown in China would likely hurt earnings of major local manufacturers, as the world's second-largest economy is South Korea's biggest exports market. "Investors have yet to shake their concerns about corporate debt default and shadow banking" in China, said E-Trade Investment analyst Choi Kwang-hyeok.
STX Shipbuilding Gains on Stake Purchase in Aker Yards
STX Shipbuilding Co., the first South Korean yard in China, had its biggest two-day gain in more than a week in Seoul on optimism the purchase of a stake in Norway's Aker Yards ASA will add cruise liners to its range of vessels. STX Shipbuilding has more than quadrupled this year, making it the fourth-best performer in South Korea's Kospi 200 index. The stake purchase in Aker Yards will allow STX Shipbuilding to use the Norwegian company's expertise in cruise liners, which are usually more profitable to build than STX Shipbuilding's main business of mid-sized oil tankers and commodity carriers. STX Shipbuilding and STX Engine Co. said they paid $800m for a 39.2 percent stake in Aker Yards, becoming the biggest shareholders in the company.
