By Nam Hyun-woo
Financial groups are watching their stock prices shedding value as foreign investors unload shares amid the groups' conflict with their unions.
With the moves being interpreted as an intervention in the groups' management, some are even concerned that the government's stance of empowering unions could hamper foreign investment.
On Monday, the price of KB Financial Group stock dropped to 56,600 won, down 1.39 percent from the earlier session. Since Nov. 3, when the price reached 60,000 won, the price has been declining.
Hana Financial Group is also facing a similar situation, with its price on a downtrend from 48,550 won, Nov. 3, to 45,350 won, Monday, down 1.09 percent.
The two groups are at odds with their respective unions.
The union of Hana Financial Group is preparing a suit against Chairman Kim Jung-tai and KEB Hana Bank CEO Ham Young-joo for their alleged involvement in a corruption scandal surrounding former President Park Geun-hye and her confidant Choi Soon-sil.
KB Financial chief Yoon Jong-kyoo is also under investigation over allegations that he manipulated a non-binding survey on his second term. The group's union, which reported the suspicion to police, is opposing Yoon from being granted another term at a Nov. 20 shareholders' meeting.
Following the disputes, foreign shareholders are busy unloading their shares in the groups.
The ratio of foreign shareholder in Hana Financial Group has dropped from 73.6 percent, Nov. 3, to 73.49 percent, Nov. 10. From Nov. 3 to Monday, foreigners have been net selling Hana Financial shares except on Nov. 7.
KB Financial's ratio of foreign shareholder haz been rising from 68.3 percent in October, but it has been stuck at 69 percent from Nov. 7 to 10.
A wide interpretation on the downturn is that investors are realizing profits, after the groups post record-high profits in their third quarter earnings.
Hana Financial logged 510 billion won in net profit, up 13.3 percent year-on-year. Following the sound earnings, the group said its accumulated net profit in the first three quarters of this year stood at 1.54 trillion won, surpassing that of all of 2016.
KB Financial also announced some handsome numbers -- 897.5 billion won in net profits in the third quarter and 2.76 trillion won in accumulated net profits from January to September, up 63.2 percent year-on-year and surpassing the 2.14 trillion won net profits which the group logged at the end of last year.
However, some analysts say that the downtrend is also in line with foreign investors' view on unions' excessive interruption in company management.
Last week, Institutional Shareholder Services (ISS), one of the largest providers of corporate governance counseling for asset owners in the world, issued an opposition paper to the KB Financial union's move to exclude its CEO from the board.
"As seen in the ISS report, global recognition on unions' intervention is a risk," a Seoul-based analyst said, asking not to be named. "It will be premature to judge that foreign investors are selling shares because of unions. However, if similar kinds of labor-management conflicts continue, they could be a factor undervaluing domestic financial groups."
Financial groups are watching their stock prices shedding value as foreign investors unload shares amid the groups' conflict with their unions.
With the moves being interpreted as an intervention in the groups' management, some are even concerned that the government's stance of empowering unions could hamper foreign investment.
On Monday, the price of KB Financial Group stock dropped to 56,600 won, down 1.39 percent from the earlier session. Since Nov. 3, when the price reached 60,000 won, the price has been declining.
Hana Financial Group is also facing a similar situation, with its price on a downtrend from 48,550 won, Nov. 3, to 45,350 won, Monday, down 1.09 percent.
The two groups are at odds with their respective unions.
The union of Hana Financial Group is preparing a suit against Chairman Kim Jung-tai and KEB Hana Bank CEO Ham Young-joo for their alleged involvement in a corruption scandal surrounding former President Park Geun-hye and her confidant Choi Soon-sil.
KB Financial chief Yoon Jong-kyoo is also under investigation over allegations that he manipulated a non-binding survey on his second term. The group's union, which reported the suspicion to police, is opposing Yoon from being granted another term at a Nov. 20 shareholders' meeting.
Following the disputes, foreign shareholders are busy unloading their shares in the groups.
The ratio of foreign shareholder in Hana Financial Group has dropped from 73.6 percent, Nov. 3, to 73.49 percent, Nov. 10. From Nov. 3 to Monday, foreigners have been net selling Hana Financial shares except on Nov. 7.
KB Financial's ratio of foreign shareholder haz been rising from 68.3 percent in October, but it has been stuck at 69 percent from Nov. 7 to 10.
A wide interpretation on the downturn is that investors are realizing profits, after the groups post record-high profits in their third quarter earnings.
Hana Financial logged 510 billion won in net profit, up 13.3 percent year-on-year. Following the sound earnings, the group said its accumulated net profit in the first three quarters of this year stood at 1.54 trillion won, surpassing that of all of 2016.
KB Financial also announced some handsome numbers -- 897.5 billion won in net profits in the third quarter and 2.76 trillion won in accumulated net profits from January to September, up 63.2 percent year-on-year and surpassing the 2.14 trillion won net profits which the group logged at the end of last year.
However, some analysts say that the downtrend is also in line with foreign investors' view on unions' excessive interruption in company management.
Last week, Institutional Shareholder Services (ISS), one of the largest providers of corporate governance counseling for asset owners in the world, issued an opposition paper to the KB Financial union's move to exclude its CEO from the board.
"As seen in the ISS report, global recognition on unions' intervention is a risk," a Seoul-based analyst said, asking not to be named. "It will be premature to judge that foreign investors are selling shares because of unions. However, if similar kinds of labor-management conflicts continue, they could be a factor undervaluing domestic financial groups."
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