Spotlight: Ent., cosmetics shares in S.Korea drop on worry about THAAD deployment

Entertainment and cosmetics shares in South Korea, which heavily depend on Chinese consumers for revenue, declined on Friday in Seoul trading on growing worry about a decision to deploy Terminal High Altitude Area Defense (THAAD) in its soil.

YG Entertainment, which has a boy band Big Bang and Gangnam Style's Psy, tumbled 4.5 percent, keeping a downward momentum for six straight trading days. The shares declined to the lowest in 52 weeks during the trading.

SM C&C, a video contents developing unit of SM Entertainment which manages K-pop girl group Girls' Generation and many other K-pop stars, plunged 5.6 percent.

Keyeast, which manages actor Kim Soo Hyun who played the lead role in mega-hit drama"My Love from the Star,"slipped to the 52-week low during the trading.

Recent downturn in entertainment shares followed the decision between Seoul and Washington about a month earlier to install one THAAD battery by the end of next year, which severely damages security interests of China and Russia and breaks strategic balance in the region.

Despite strong oppositions from neighboring countries, South Korean government officials took things easy in an early stage about possible negative impacts from the THAAD deployment economically and diplomatically.

Recent drop in entertainment shares reflects rising concerns among investors and South Korean people about the THAAD deployment that will negatively affect the popularity of so-called Hallyu, or Korean Wave.

THAAD's X-band radar can snoop on Chinese territory and military activities. Chinese consumers will naturally be reluctant to consume cultural contents and industrial products from South Korea as the deployment will strain bilateral relations. China is South Korea's largest entertainment market.

A recent survey showed that more than four-fifths of Chinese people would support the ban on the appearance of South Korean entertainers in Chinese TV programs if the government does so. It reflects Chinese people placing love for their home country before popularity of entertainment stars.

The KOSDAQ index, which includes entertainment shares, slumped 0.8 percent on Friday, in a stark contrast to a 0.9 percent gain in the KOSPI index, Seoul's main bourse.

Among the listed KOSPI shares, cosmetics stocks took a hit on concerns that Chinese consumers may boycott South Korean products in protest against the THAAD deployment that damages security interests of their homeland.

The country's leading cosmetics maker Amore Pacific slumped 2.7 percent, with LG Household & Health Care retreating 4.5 percent. Other major cosmetics shares also lost ground.

Some of South Korean conservative media organizations and experts claimed that economic and diplomatic effects from the THAAD deployment would be small or short-lived, seeking to conceal a reality of dissatisfaction and objections from Chinese government and people that may develop into fury.

They should avoid such attempts to hide what THAAD really is or even criticize rational Chinese opposition to the THAAD deployment, while the South Korean government should abandon its attitude of taking things easy. Endit