South Korean brokerages have cut their third-quarter earnings forecasts for about 61 percent of major listed firms due to a Seoul-Tokyo trade spat, a market tracker said Aug. 19.
Local securities companies expected 61.2 percent of the 224 companies listed on the main stock market, or 137, to see their operating income for the July-September period get worse than predicted as of end-June, according to FnGuide.
The operating profit of 83 firms is projected to take a turn for the better, with estimates for the remaining four unchanged.
Out of the 137 firms, earnings forecasts for 131 firms have been trimmed. Three companies are expected to swing to a loss and as many enterprises are forecast to suffer wider losses.
The 224 companies cover businesses for which three or more local securities companies have put forward operating income forecasts.
Chip giant SK hynix has suffered the biggest downgrade.
The company is predicted to post an operating income of 432.7 billion won ($357 million) for the third quarter, down a whopping 52.5 percent from end-June.
The median forecast for the third-quarter operating profit of Samsung Electronics has been cut by 7.6 percent to 6.94 trillion won.
Securities companies have also lowered third-quarter earnings forecasts for travel agencies amid a tumble in demand for trips to the neighboring country.
Meanwhile, leading automaker Hyundai Motor has basked in a 3.8 percent rise in its operating profit outlook to 985.7 billion won. The average forecast for No. 2 carmaker Kia Motors has risen 8.7 percent to 448.8 billion won.
The trade row between Korea and Japan started in early July when Tokyo curbed exports of key materials to Seoul in apparent retaliation over a spat surrounding wartime forced labor.
By Ram Garikipati and newswires (firstname.lastname@example.org)