STX Group falls on funding concerns
STX Shipbuilding Co, owner of Europe's No 1 shipyard, extended declines among group companies in Seoul and Singapore on concern that South Korea's plan to cool inflation may make borrowing funds for acquisitions difficult.
STX Shipbuilding dropped 3 per cent to 25,950 won as at 11.44 am in Seoul. STX Pan Ocean Co, South Korea's largest operator of bulk carriers, fell 3.5 per cent to $2.46 in Singapore.
South Korea's government will focus on controlling inflation, which rose by the fastest pace in almost 10 years last month, by tightening bank lending. It will also restrict corporate loans to the nation's largest groups that seek to borrow funds for mergers and acquisitions.
'The government's plan has dampened sentiment and caused investors to worry about financial risks for companies that are involved in acquisitions such as STX Group,' said Lee Jae Kyu, an analyst at Mirae Asset Securities Co in Seoul. He rates STX Shipbuilding a 'buy'.
STX Group is considering taking part in the bid for a 50.4 per cent stake in Daewoo Shipbuilding & Marine Engineering Co, the world's third largest shipbuilder. The equity is worth about 3.63 trillion won (S$4.7 billion) based on Wednesday's closing price of 37,600 won.
STX Shipbuilding and STX Engine Co, South Korea's third largest maker of marine engines, are offering to buy more shares in Aker Yards ASA of Norway after they increased their holdings to 40.4 per cent.
STX Shipbuilding dropped 3 per cent to 25,950 won as at 11.44 am in Seoul. STX Pan Ocean Co, South Korea's largest operator of bulk carriers, fell 3.5 per cent to $2.46 in Singapore.
South Korea's government will focus on controlling inflation, which rose by the fastest pace in almost 10 years last month, by tightening bank lending. It will also restrict corporate loans to the nation's largest groups that seek to borrow funds for mergers and acquisitions.
'The government's plan has dampened sentiment and caused investors to worry about financial risks for companies that are involved in acquisitions such as STX Group,' said Lee Jae Kyu, an analyst at Mirae Asset Securities Co in Seoul. He rates STX Shipbuilding a 'buy'.
STX Group is considering taking part in the bid for a 50.4 per cent stake in Daewoo Shipbuilding & Marine Engineering Co, the world's third largest shipbuilder. The equity is worth about 3.63 trillion won (S$4.7 billion) based on Wednesday's closing price of 37,600 won.
STX Shipbuilding and STX Engine Co, South Korea's third largest maker of marine engines, are offering to buy more shares in Aker Yards ASA of Norway after they increased their holdings to 40.4 per cent.