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Hanjin Shipping will be delisted today

IMA 2017-06-02 Number of views 5,552

Hanjin Shipping will be delisted from the domestic bourse today, ending its eight-year trading history.

According to the Korea Exchange (KRX), Monday, the company will be delisted from the main KOSPI market after seven sessions of sell-off trading. It was listed on the bourse Dec. 29, 2009, at 21,300 won ($18.41).

The last day of the former No. 1 shipper in Korea was devastating. It closed at 12 won, Monday, falling 68.42 percent from 38 won in a session earlier.

This is a stark contrast to the company’s heyday. On Jan. 7, 2011, its stock price reached an all-time high of 38,694 won, boosted by handsome earnings. In 2010, the company posted 9.63 trillion won in sales, 686.7 billion won in operating profit and 289.6 billion won in net profit.

The bullishness lasted less than a year. It suffered a 492.6 billion won operating loss and posted 823.9 billion won in net losses throughout 2011 amid the slowdown in the global shipping industry.
 
Hanjin Shipping has since posted losses for three consecutive years and was merged into a Hanjiin Group affiliate. The company’s debt soared to 5.6 trillion won during this period.

After the shipper went into court receivership in September last year, the company’s shares have fallen prey to speculators’ predatory flipping. Its stock price fell below 1,000 won ― the smallest note in the Korean currency.

At that time, Hanjin shares’ turnover ratio reached 1,800 percent. Individual investors and large institutional investors flocked to the shares. Individuals, who had a glimpse of hope that the shares may surprisingly rise, bought some 1.78 million shares Feb. 2, the day before Hanjin shares were suspended from trading. On the same day, foreigners sold 1.8 million shares, dealing a heavy blow to individual traders.
 
After the Seoul court decided to scrap rescue efforts on the shipper on Feb. 2, shareholders were given seven days to liquidate their shares. During the period, the price fell from 780 won to 12 won.

Experts had warned shareholders that investing in Hanjin during the given period was extremely dangerous because holding the stock after the period would leave them “almost nothing,” because Hanjin shareholders would be the lowest in the pecking order for compensations coming from the company’s liquidation.

However, there were some individual traders, who pinned their hope on flipping.

“I feel like I’ve been stunned,” said an investor who bet “quite a large amount of money” on Hanjin in a belief that Hanjin may be relisted in the future. “There was a rumor that Hanjin may be resuscitated because its restructuring was done for the sake of banks. I’m still contemplating over whether I should hold these shares or sell them.”
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