'Large-scale Rights Offering' Korea Zinc Hits Lower Limit
On the 30th, the domestic stock market closed lower amid foreign selling pressure. Individual stock volatility increased, with Korea Zinc, which announced a large-scale rights offering, hitting the lower limit price. Additionally, the Democratic Party of Korea proposed supplementary legislation based on the implementation of the financial investment income tax (금투세), leading to an overall contraction in investor sentiment.
Employees are working in the dealing room of Hana Bank in Euljiro, Seoul. Photo by Younghan Heo younghan@
On the day, the KOSPI closed at 2,593.79, down 24.01 points (0.92%) from the previous trading day. The index opened at 2,606.99, down 10.81 points (0.41%), and closed with a larger decline. Foreigners sold stocks worth 334.9 billion KRW, while individuals and institutions bought stocks worth 272.1 billion KRW and 39.6 billion KRW, respectively.
Among the top market capitalization stocks, NAVER (3.67%), SK Hynix (2.47%), LG Chem (0.63%), LG Energy Solution (0.61%), Kia (0.43%), and Hyundai Mobis (0.40%) rose. Conversely, Samsung C&T (-4.63%), Shinhan Financial Group (-3.88%), Hana Financial Group (-3.69%), POSCO Holdings (-1.88%), KB Financial Group (-1.68%), Hyundai Motor (-1.56%), Samsung Biologics (-1.53%), and Samsung SDI (-1.45%) declined.
In particular, Korea Zinc (-29.94%), which is in a management rights dispute with MBK, announced a rights offering of 3.73 million shares at a planned issue price of 670,000 KRW per share?about half of the intraday quoted price?resulting in the stock hitting the lower limit price. The funds raised through the rights offering will be used to repay loans taken out for the open market repurchase of treasury shares.
By sector, steel and metals (1.62%), telecommunications (1.09%), services (0.77%), and pharmaceuticals (0.16%) rose. However, most sectors declined, including machinery (-4.09%), food and beverages (-2.74%), electrical and electronics (-2.63%), medical precision (-2.55%), securities (-2.28%), and manufacturing (-1.92%).
The KOSDAQ index closed at 738.19, down 5.99 points (0.80%) from the previous session. The index opened at 743.53, down 0.65 points (0.09%), and ultimately failed to rebound. Foreigners and institutions net sold stocks worth 69.1 billion KRW and 13.5 billion KRW, respectively, while individuals net bought stocks worth 76.7 billion KRW.
Among the top market capitalization stocks, ST Pharm (2.85%), Silicon투 (2.38%), and Pearl Abyss (0.78%) rose. Stocks such as Enchem (-3.87%), , (-3.61%), EO Technics (-2.84%), Classys (-2.45%), HLB (-2.23%), Ligachem Bio (-2.20%), Samchundang Pharmaceutical (-2.15%), and EcoPro BM (-2.07) declined.
Ji-won Kim, a researcher at KB Securities, said, "Investor sentiment was dampened by increased volatility in individual stocks and the proposal of supplementary legislation based on the implementation of the financial investment income tax." He added, "Following the downward revision of earnings forecasts by U.S. semiconductor company AMD, concerns about growth in the artificial intelligence (AI) sector also led to weakness in domestic semiconductor stocks."
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