South Korean Stocks Drop Due To China Restrictions

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Stocks, specifically entertainment and cosmetic stocks of South Korea are plunging down due to the fact that these companies failed to restore their recent loses. The reason behind the lost was China’s restriction of airing Korean contents in local Chinese stations.

According to reports, the survey results as to why it was banned is the possibility of the Korean officials to deploy a US anti-ballistic missile system, resulting to the country to fear the action and thus banning Korean cultures or commercials to air on national Chinese channels.

In a statement released in reports, it was summarized in details as to what can be aired and what elements cannot be aired. “In November, according to our channel checks, Chinese authorities appear to have banned 1) the broadcasting of any TV advertising with Korean artists as brand ambassadors, 2) Korean artists participating in any TV programs, 3) Sino-Korean cooperation on variety show/dramas and 4) broadcasting of TV programmes containing any Korean elements including Korean corporations and brands.”

The restriction comes with a big seriousness except for Korean Dramas who had an impact on both countries positively.

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Entertainment and Cosmetic stocks that are traded in China fell last month as a result to these changes. Kospi index rose 0.9 percent and such raise is still considered to be low. An example to fallen stock in its entertainment sector is CJE&M which traded at 8.5 percent with a value of 130,960 WON. The said record is as low as its last which was at May 2015.

Some of the famous agencies which produced K-Pop clusters also fell on last month’s trading session. YG Entertainment, SM Entertainment and JYP Entertainment all fell to a number of 6.6, 8 and 3 in percentage.

Notable cosmetic companies who captured the hearts of the Chinese market also fell due to the restriction. Amorepacific as an example fell to 3.5 percent and another is LG Household and Healthcare which fell to 5.8 percent last month.

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