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Emerging markets' downturn to pose risk to energy firms

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(Globalpost/GlobalPost)

SEOUL, Aug. 28 (Yonhap) -- South Korea's energy companies are the most vulnerable to economic downturn in emerging markets in Asia, data showed Wednesday, due mainly to their heavy dependency on sales there.

According to the data compiled by the Morgan Stanley Capital International and industry sources, five out of 10 South Korean companies that were most exposed to risks stemming from Asia's emerging economies were energy-related firms.

Lotte Chemical Corp., a petrochemicals maker, was referred to as the most crisis-prone South Korean company amid the markets' downturn, as it depends on India, Indonesia, Thailand and Malaysia for 18.02 percent of its sales.

Such countries are widely seen as crisis-prone markets as they have been suffering from market turmoil as speculation over the United States Federal Reserves' stimulus tapering accelerated foreign capital flight.

The emerging markets accounted for 9.87 percent, 7.07 percent and 6.57 percent of sales of S-Oil Corp., SK Holding Co. and SK Innovation, respectively.

Other risk-prone firms included auto-parts maker Halla Visteon Climate Control Corp. and Daewoo International Corp., with their dependency on the four markets reaching 9.97 percent and 8.59 percent, each.

Meanwhile, major firms listed on the main bourse maintained a relatively lower dependency on the countries, with that of tech giant Samsung Electronics Co. and top carmaker Hyundai Motor Co. reaching 3.5 percent and 1.16 percent, respectively.

Leading steelmaker POSCO and auto-parts maker Hyundai Mobis Co. held a comparable figure of 1.8 percent and 0.8 percent, respectively. The four countries made up only 0.2 percent of Kia Motors Corp.'s sales.

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http://www.globalpost.com/dispatch/news/yonhap-news-agency/130827/emerging-markets-downturn-pose-risk-energy-firms