* KOSPI falls 0.44 pct
* Daewoo Engineering rallies after sale plan by Kumho Asiana
* Doosan Heavy falls on overhang concerns
(Updates to close)
By Jungyoun Park
SEOUL, June 29 (Reuters) - Seoul shares fell on Monday, with
Kumho Industrial (002990.KS) tumbling on worries about potential
financial losses from the planned sale of Daewoo Engineering
(047040.KS), but Daewoo Engineering advanced, while shipbuilders
fell.
The Korea Composite Stock Price Index (KOSPI)
finished down 0.44 percent at 1,388.45 points.
"Investors are cautious ahead of key economic data this week
and second-quarter earnings in July," said Kim Seong-bong, a
market analyst at Samsung Securities.
South Korea's industrial and service sector output growth and
export growth data are due out this week.
"Falls in other regional markets including Japan, also
weighed. There is a lack of upward momentum globally," Kim added.
But shares in Daewoo Engineering & Construction (047040.KS)
climbed 7.0 percent after news Kumho Asiana Group planned to put
it up for sale to ease investor worries about the group's
liquidity. [ID:nSEO340774]
Analysts said the news removed a key factor -- its
affiliation with Kumho Asiana Group -- that had pressured Daewoo
Engineering shares.
Kumho Asiana Group has been haunted by talk of liquidity
problems after its purchase of assets including Daewoo
Engineering and Korea Express (000120.KS) in recent years.
Kumho Industrial and Kumho Petrochemical (011780.KS) gave up
their earlier gains, tumbling 14.91 percent and 2.07 percent
respectively, on worries about potential financial losses from
the sale of Daewoo Engineering.
"There are concerns about capital writedown, as Kumho Asiana
Group is still responsible for honoring a put-back option with
investors," said Kang Seung-min, an analyst at NH Investment &
Securities.
Financial investors in Daewoo have the right to sell their
stakes back to Kumho group at 31,500 won per share by the end of
this year, sharply higher than Daewoo's closing share price of
13,700 won.
"Financial losses are inevitable despite the sale of Daewoo
Engineering because of burdens from the put-back option," said
Hong Seo-yeon, an analyst at Dongbu Securities.
Shipbuilders and shipping issues declined amid the latest
falls in baltic dry index .BADI, which tracks the cost of
shipping key dry commodities.
Hyundai Heavy Industries (009540.KS) fell 1.05 percent and
Samsung Heavy Industries (010140.KS) lost 1.57 percent.
Key exporters that are widely expected to enjoy healthy
earnings, such as Samsung Electronics (005930.KS), the world's
No.1 memory chipmaker, outperformed. Samsung Electronics ended up
0.34 percent and LG Display (034220.KS), the world's No.2 maker
of liquid crystal displays (LCDs) advanced 0.78 percent.
Doosan Heavy Industries (034020.KS) tumbled 6.26 percent for
a second session on Monday after Doosan Heavy confirmed on Friday
it had sold some of its shares without specifying a reason or
amount.
Analysts said a sudden increase in the volume of shares
available in markets pressured share prices, adding that there
were new concerns about a potential share sale by Korea
Development Bank (KDB).
KDB controlled 7.18 percent of Doosan Heavy, according to a
filing in mid-May.
"Shares will trade weak for some time following the share
sale by Doosan Heavy. Also there are overhang concerns regarding
KDB's stake in Doosan Heavy," said Ha Seok-won, an analyst at
Woori Investment & Securities.
"There is talk in the market that KBD may sell its 7.18
percent stake in the company," Kim Hong-gyun, an analyst at
Hanwha Securities.
