Travel and cosmetics stocks have suffered a sharp decline in their market value as the outbreak of the Middle East Respiratory Syndrome in South Korea has dampened sentiment among consumers and investors alike, data showed Wednesday, sparking worries over its economic impact in Asia’s fourth-largest economy.
South Korea on Wednesday confirmed nine deaths from MERS and reported 13 new cases, bringing the total number of people diagnosed with the disease to 108 after the first outbreak on May 20.
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| A near-empty cosmetics store on a popular Seoul shopping district, Garosu-gil, on Tuesday. (Yonhap) |
Worsening sentiments have sent leisure, airlines and cosmetics shares tumbling on the Seoul bourse, with their market cap falling more than 5 trillion won ($4.5 billion) over the past three weeks, according to the data compiled by the main bourse operator, the Korea Exchange.
Tour agencies have taken a direct hit after thousands of Chinese have canceled their trips to Korea over growing fears of the contagious disease.
Shares in Hana Tour Co., the nation’s biggest tour agency, and No. 2 Mode Tour dipped 7 percent and 10.3 percent, respectively, as of Tuesday compared with May 20.
Leading carrier Korean Air Lines Co. dropped 9.1 percent and its smaller rival Asiana Airlines Inc. retreated 10.6 percent during the same period.
Cosmetics, which heavily rely on Chinese consumers, were also hit hard.
AmorePacific Group, the nation’s leading cosmetics maker, fell 6.4 percent, and No.2 player LG Household & Health Care Ltd. sank 11.2 percent.
Market watchers expected a slump in second-quarter earnings in related industries, while keeping a close watch on the government’s handling of the disease to gauge its long-term effects on the national economy.
“China’s growth rate plunged in 2003 when Severe Acute Respiratory Syndrome hit the nation,” said Lee Young-hwan, a researcher at LIG Investment & Securities. “It needs further monitoring as the economic implication depends on how far MERS is spreading across the country.” (Yonhap)
