South Korean companies, which depend heavily on Chinese consumers for revenue, have lost 11.2 trillion won (10 billion U.S. dollars) in stock value since the decision between Seoul and Washington to deploy Terminal High Altitude Area Defense (THAAD) in South Korean soil.
Local brokerage Samsung Securities said in a report on Monday that 10 major stocks relevant to Chinese consumers totaled 50.6 trillion won in market capitalization as of last Friday, down from 61.8 trillion won on July 7, a day before the THAAD deployment announcement.
During the same period, the benchmark KOSPI index advanced 2.6 percent, while the 10 stocks posted an average decline of 18.2 percent. Seoul's decision to deploy one THAAD battery by the end of next year came despite strong objections from China and Russia, which have repeatedly said the deployment damages their security interests and breaks strategic balance in the region.
It caused concerns among investors that Chinese consumers would refrain from consuming cultural products and industrial goods from South Korea as they place national interests before the popularity of so-called Hallyu, or "Korean Wave". SM Entertainment, which manages girl group Girls' Generation and many other Hallyu stars, tumbled the most among the 10 stocks by 26.7 percent in the cited period.
Cosmetics giants Amore Pacific and LG Household & Health Care plunged 17.8 percent and 22. 3 percent each, while YG Entertainment managing boy band Big Bang and Gangnam Style's Psy retreated 11.1 percent.
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