Stocks Favored by Mirae Asset Plunge
By Yoon Ja-young and Park Hyong-ki
Staff Reporters
Doosan Corp. and dozens of other blue-chip stocks that are more than 5 percent owned by Mirae Asset Investments suffered steep falls Friday. Mirae Asset Securities, which has long soared on positive earnings outlook, fell to the daily limit-low during the session before recovering a bit later in the session.
Analysts said that these stocks, favored by Mirae Asset fund managers, have risen too fast in too short a period, suffering severe corrections than other stocks. At the same time, adding to the downward pressure on the stocks were unconfirmed market rumors that that some employees of Mirae Asset booked huge gains by buying these stocks in advance.
As witnessed in the recent blind rush of more than 4 trillion won to Mirae Asset's ``Insight Fund,'' the nation's top fund management firm has a strong presence on the market and most of the stocks it bought, so far have posted rapid gains.
However, investor sentiment recently turned cautious after the Financial Supervisory Service said that it will check whether Mirae Asset violated any rules in the process of selling funds.
Top regulators have also repeatedly expressed concern over the sudden rush of money into the ``Insight Fund,'' warning that investors could incur losses when the market takes a downhill turn.
Doosan Corp. closed down 10.6 percent at 169,500 won and Doosan Heavy Industries lost 5.4 percent to 122,000. Amore Pacific lost 6.1 percent to 690,000.
Mirae Asset Securities closed down 14.3 percent at 138,000 won. The benchmark KOSPI closed down 1.5 percent at 1,772.88.
Kim Sung-bong, an analyst at Samsung Securities, said a psychological factor is driving investors to dump stocks. ``Investors may be withdrawing money from the Mirae Asset funds as the rumor of investigation is causing concern. The stocks owned by Mirae Asset are plunging,'' Kim said.
They've dropped excessively, according to Kim. ``Mirae Asset bought the leading stocks in the industries, based on the good performances. There was overshooting in the prices, but the 30 to 40 percent fall from the ceiling seems too much. They have good fundamentals.''
Since Mirae Asset stocks have led the market the index would be affected, but for the short-term, he added.
Mirae Asset Investments rejected market rumors involving its employees reaping profits by buying stocks in advance.
``The rumors are not true. We will take legal action against those spreading such rumors,'' it said in a statement.
``The rumors are not going to drive the stock market. It's economic fundamentals that direct the performance of stocks,'' said Kim Seung-han, an analyst of CJ Investment & Securities.
Won Jong-hyuck, an analyst of SK Securities, echoed Kim, saying that Mirae Asset doesn't set the tone of the broader market or stocks, even though it is an influential company.
``Since most of those stocks in which Mirae Asset has interest in are blue chips, their long-term performances are not based on such malicious rumors,'' said Won.