Thursday, May 1st, 2014
SEOUL, KOREA - Automobile shares are falling out of fears of a continuing strong won. At 1:25 pm on April 30, the shares of Hyundai Motor were traded at 229,500 won, down 1.92 percent from the previous day's 234,000 won. Other auto shares such as Hyundai Mobis and Kia Motors also fell 2.49 percent and 2.08 percent, respectively.
The decline was led mainly by foreign investors' net-selling. For example, as many as net-selling orders worth 10 billion won have been placed through foreign securities firms. In the total transportation sector including the auto segment, foreigners have net-sold 31.7 billion won.
Choi Hee-geun, Hyundai Securities analyst, said, "Until yesterday the won-dollar exchange rate fell to a record-low level, which it seemed revived the worries about the price competitiveness of Korea's major exporters including car makers. But this is in no way a problem in fundamentals."
On the 29th, the won-dollar exchange rate declined 4.40 won from the previous day and closed at 1,030.60 won per dollar. This is largely because exporters sold a large amount of dollars in the market to pay for end-of-month bills. A Bank of Korea announcement on the same day that Korea's current account balance was in surplus for 25 consecutive months has also helped in depressing the currency rate.