More than 60 entities have been delisted from South Korea’s stock market last year, up 60 percent from a year ago, due to underperforming shipping investment companies that made huge losses in the aftermath of Hanjin Shipping bankruptcy.
According to Korea Exchange on Sunday, a total of 62 companies were struck off from the stock market last year, up from 39 firms in the previous year. A slew of delisting has led investors to face big losses despite the rally staged by the country’s benchmark stock index surpassing the 2,500 mark.
The sudden rise in the number of delisted firms comes as a number of shipping investment companies or shipping funds suffered delisting and filed for voluntary procedure. Special purpose acquisition companies also failed to promote mergers.
Last year, 14 shipping investment companies including Korea Pacific No. 01 Ship Investment Co. and Dongbuka No. 10 Ship Investment Co. applied for voluntary delisting procedure and audit opinion disclaimers. Shipping funds are mutual funds created with the purpose of investing in marketable securities. They collect funds to invest in ships and manage them to generate profit.
A majority of the shipping funds have made huge losses as investment companies were not able to receive up to billions of won worth of charter fees due to the bankruptcy of once world’s seventh-largest container shipper Hanjin Shipping that rented out vessels. Some shipping funds sold off ships - their key asset - from 2016 amid the sluggish shipping industry but were still unable to survive overall profit deteriorating structure.
Meanwhile, Chinese firms including China Ocean Resources Co. and garden machinery maker Wayport also departed the Korean stock market.
By Park Yoon-koo and Lee Eun-joo
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]