Seoul shares down; LG Display, Kia Motors tumble

Thu Feb 26, 2009 7:04am GMT

Quotes

   

 *KOSPI loses 1.15 pct
 *Kia Motors falls on bond issuance talk
 *LG Display tumbles on stake sale rumors
 (Updates to close)
 By Jungyoun Park
 SEOUL, Feb 26 (Reuters) - Seoul shares fell on Thursday led
by Kia Motors (000270.KS) and LG Display (034220.KS), but rose
from the session low after South Korea unveiled measures aimed at
spurring foreign investment in local public bonds.
 The Korea Composite Stock Price Index .KS11 (KOSPI)
finished down 1.15 percent at 1,054.79 points, giving up an
earlier 3 percent gain to the session high of 1,100.45 points.
 "Worries that Citigroup may be nationalised and persistent
concerns about Eastern European banks, pointing to the likelihood
of growing avoidance of emerging market currencies, weighed on
markets," said Bae Sung-young.
 "As the outlook and sentiment worsens, we are seeing foreign
programme selling positions being accumulated in massive amounts
-- a pattern repreatedly seen before markets turn for the worse,"
Bae added.
 But the KOSPI index ended 18 points above the session low of
1,036.67 after South Korea unveiled a string of measures aimed at
encouraging foreign investment in domestic public bonds in order
to dispel concerns about the country's dollar shortages.
[ID:nSEV000624]
 Kia Motors (000270.KS) tumbled 9.32 percent on market talk
the South Korean automaker may issue bonds with warrants, which
would give holders the rights to buy new shares.
 A Kia Motors official told Reuters a bonds with warrants
issuance was under consideration.
 The issuance is expected to be worth around 400 billion won
($263.9 million), which stoked concerns it may dilute shareholder
value, according to Kevin Lee, an analyst at Goodmorning Shinhan
Securities.
 Shares in LG Display (034220.KS) also lost ground on rumors
Philips (PHG.N) may sell down its around 13 percent stake in the
world's No.2 liquid crystal display maker.
 "This is not new, but there are rumors that Philips may in
the near future cut its stake in LG Display. That is weighing on
shares," said Jeff Kim, an analyst of Hyundai Securities.
 "There has not been any big change in LG Display's
fundamentals," Kim added.
 However KT Corp (030200.KS) advanced 0.79 percent after South
Korea's anti-trust agency approved on Wednesday KT's plan to
merge with its mobile unit without conditions. [ID:nSEL000508]
 Broadcaster SBS (034120.KS) climbed 4 percent over hopes for
media regulation changes that could allow it to air commercials
during programs.
 A revised media bill was presented to a parliament committee
without opposition party approval, according to local media
reports on Thursday.
 "There are disputes over the revised bill, but I think the
market is betting on its passage...SBS could definitely be a big
beneficiary of the change as it would be allowed to air
commercials during programs," said Sohn Yoon-kyung, an analyst at
Kiwoom.Com Securities.
 Further weakness in the won and continued worries about the
economy sent retail issues lower. Shinsegae Co Ltd (004170.KS)
slid 2.28 percent and Lotte Shopping Co Ltd (023530.KS) sank 2.5
percent.
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