March 4, 2017 4:08 am JST

Cosmetic, travel stocks take different paths in Seoul, Tokyo

Investors see gains for Japan amid reports of China restricting Korea travel

Japanese cosmetics company Kose's Sekkisei brand is popular among Chinese.

TOKYO -- Shares of companies trading in cosmetics and travel dropped sharply in Seoul but rose in Tokyo Friday, as investors reacted to reports that the Chinese government has told Beijing-area travel agencies to curb tourism to South Korea.

On the Korea Exchange, AmorePacific Group's stock price slumped 13% on the day and Hankook Cosmetics Manufacturing plunged 19%. Luxury hotel operator Hotel Shilla also fell 13%, and Korean Air Lines slipped 5%. The Kospi index overall ended down 23 points, or 1.1%.

The Tokyo market enjoyed a reverse effect as investors saw a potential rise in Chinese tourism. Cosmetics company Kose, with brands such as Sekkisei that are popular among Chinese, reached 5% higher on the day at one point. Prices also climbed for a number of drugstore operators, such as Matsumotokiyoshi Holdings.

Beijing seems to be retaliating against Seoul for hosting the U.S. Terminal High Altitude Area Defense anti-missile system. On top of the travel cutback, conglomerate Lotte Korea -- which agreed last month to provide land for THAAD -- suffered a hacking attack Wednesday and Thursday that briefly brought down a duty-free unit's retail site.

Chinese officials have become particularly strict on material standards for cosmetics, and in numerous cases have turned away Korean imports of the goods. "This is a big blow to South Korea's economy, since China is a major trade partner," says Kiyoshi Ishigane, chief strategist at Mitsubishi UFJ Kokusai Asset Management.

Many believe that "retail investors making short-term trades were the main drivers lifting cosmetics stocks in Tokyo," in the words of a Japanese securities firm. The advances did not spread to department store operators, some of which had notably weak showings despite expected gains in tourist trade.

(Nikkei)

KOSÉ Corp.

Japan

Market(Ticker): TKS(4922)
Sector:
Industry:
Consumer Non-Durables
Household/Personal Care
Market cap(USD): 6,378.16M
Shares: 60.59M

Matsumotokiyoshi Holdings Co., Ltd.

Japan

Market(Ticker): TKS(3088)
Sector:
Industry:
Retail Trade
Food Retail
Market cap(USD): 3,157.98M
Shares: 54.63M
Asia300

AmorePacific Group, Inc.

South Korea

Market(Ticker): KRX(002790)
Sector:
Industry:
Consumer Non-Durables
Household/Personal Care
Market cap(USD): 11,463.3M
Shares: 88.90M
Asia300

Korean Air Lines Co., Ltd.

South Korea

Market(Ticker): KRX(003490)
Sector:
Industry:
Transportation
Airlines
Market cap(USD): 3,019.4M
Shares: 95.95M

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