By Kang Seung-woo, Kim Yoo-chul
As a result of the upheaval in Egypt, share prices took a nosedive to the 2,600 mark and the won lost ground against the U.S. dollar.
Big firms are evacuating their staff from Egypt or planning to do so, the center of their businesses in northern Africa.
The Korea Composite Stock Price Index (KOSPI) closed down 34.14 points, or 1.81 percent, to 2,069.73. Trading volume was moderate at 316.9 million shares worth 7.29 trillion won ($6.5 billion), with losers far outnumbering gainers 607 to 219.
“Egyptian woes were reflected in hefty foreign selling,” said a Seoul-based economist.
Foreign investors sold a net 693.8 billion won worth of stocks, which is the biggest net selling by foreigners since November 2009.
“Foreigners sold both futures and spots, which implies that the issue is likely to linger. It will take some time for foreigners to shift to net buyers.”
Other Asian stock markets also dipped, as investors sought less risky investments.
Japan’s Nikkei index hit a one-month low after losing 122.42 points, or 1.18 percent, to close at 10237.92, while Hong Kong’s Hang Seng lost 264.4 points, or 1.12 percent, to 23352.7
The Korean won ended the day at 1,121.5 won to the greenback, down 7.7 won from the previous close, as investors scrambled to snap up safer assets amid escalating tension in the Middle Eastern country.
Korean firms are also affected by the anti-government protests in Egypt, a local trade body said.
Egypt is the fourth-largest market for Korean products among Arab nations behind the United Arab Emirates (UAE), Iran and Saudi Arabia. In 2010, Korea exported around $2.24 billion worth of goods to Egypt, while importing $938 million worth of products from it.
According to the Korea Trade-Investment Promotion Agency (KOTRA), many of Korean businesses and investors there are facing damage to their operations, with many of them staying at home and their family members about to leave the country.
“Most South Korean companies in Egypt have given up normal business operations due to the spread of protests, and many of them are withdrawing their workers back to Korea or to a third country,” it said in a press release.
LG Electronics, the world’s No. 2 television maker, said that it has stopped its television production line as it has been compelled to close its factory as many workers could not come to work due to the ongoing rioting, while Samsung Electronics plans to send all family members of its staff home no later than Monday (local time).
``If the unrest continues, then it is expected to see more losses,’’ said an official of LG, which raked in $100 million in total revenue last year.
``Samsung’s three Korean managers will follow the directions of the South Korean Embassy in Egypt,’’ said Samsung spokesman Park Chun-ho.
Along with the two major electronics firms, Hyundai Motor evacuated its employees to Dubai, with their families returning home.