1,101.0898 Trillion Won in Losses Erase Value at South Korea’s 10 Largest Groups
Key Facts
The combined market capitalization of listed companies affiliated with South Korea’s 10 largest groups fell to 3,371.441 trillion won on October 23, from 4,472.5308 trillion won at the end of September, a loss of 1,101.0898 trillion won. Chosun reported the figures in a report published on October 25. The decline came in a month when the KOSPI fell 18.8% through October 23. None of the 10 groups recorded an increase in market capitalization over the period. The figures show the breadth of the decline among South Korea’s largest listed companies, with losses varying markedly across groups.
SK Group posted the steepest decline among the 10 groups, with its market capitalization falling 30.1% to 1,093 trillion won on October 23, from 1,563 trillion won at the end of September. Pressure on the group was linked to the performance of SK Hynix and SK Square, whose shares fell 28.1% and 32%, respectively, during the month through October 23. Hynix lost 365 trillion won in market value, while Square’s loss totaled 48 trillion won. Chosun’s report attributed the declines in both stocks to concerns about investment burdens and the profitability of the AI industry. These moves put the bulk of the group’s losses in its two companies tied to the chip sector.
Samsung Group recorded the third-largest decline among the groups, with its market capitalization falling 24.3% to 1,636 trillion won on October 23, from 2,161 trillion won at the end of September. The market capitalization of Samsung Electronics, the group’s pivotal company, fell 19.6% to 1,260 trillion won from 1,570 trillion won. Chosun’s report cited concerns about a slowdown in AI investment, alongside selling by foreign investors. In a broader context, the Bank of Korea said on October 16 that foreign investors recorded a net outflow of $14.16 billion from domestic stocks in September. That followed a net inflow of $400 million in August, reversing the direction of flows between the two months.
By contrast, the decline at LG Group was relatively milder, with its market capitalization falling 5.3% to 180 trillion won on October 23, from 190 trillion won at the end of September. A 7.3% rise in LG Energy Solution shares during October through the 23rd helped limit the group’s losses. The report linked the gain to expectations of rising demand for energy storage systems at U.S. data centers dedicated to AI. The stock’s performance shows divergence within the group at a time when its overall market capitalization declined. This trajectory also differs from the pressure on major chip companies in the two groups with the largest losses.
Data on flows released by the Bank of Korea show that foreign investors’ net outflow from domestic stocks totaled $14.16 billion in September, after stocks recorded a net inflow of $400 million in August. In its report on group performance, Chosun said chip stocks also came under selling pressure from foreign investors. This coincided with the losses recorded by SK Hynix and Samsung Electronics, companies whose declines affected the market capitalization of their respective groups. These developments bring together two factors cited in the coverage: concerns about investment burdens and AI profitability, and foreign investor sales. But the cited outflow data cover September, while the groups’ declines in market capitalization cover the period from the end of September to October 23.
The Bank of Korea’s schedule lists October 27 as the release date for the consumer confidence index and the third-quarter GDP estimate. This corrects the date in the previous draft, which said October 26. The two indicators are scheduled for release on the same day, according to the bank’s published schedule. The release date comes after the period in which all 10 groups recorded declines in market capitalization. October 27 is the next economic data milestone listed in the bank’s schedule.