(LEAD) Seoul shares down on disappointing ‘value-up’ program

South Korean stocks closed lower Monday as investors dumped local shares on the government's weaker-than-expected plans to boost corporate value. The Korean won edged down against the U.S. dollar. The benchmark Korea Composite Stock Price Index fell 20.62 points, or 0.77 percent, to close at 2,647.08, ending a two-day winning streak. Trade volume was heavy at 519.6 million shares worth 10.8 trillion won (US$8.1 billion), with decliners sharply beating gainers 657 to 231. Institutions and individuals led the decline by selling a net 86.4 billion won and 47.5 billion won worth of local shares, respectively, offsetting a net purchase of 114.1 billion won by foreigners. "The KOSPI extended its downside mode as investors were disappointed with the government's 'value-up' program," said Lee Jae-won, an analyst from Shinhan Securities Co., adding that the plans lacked details. Earlier in the day, the South Korean financial authorities came up with broad guidelines to provide "bold incentives, including various tax incentives," to encourage voluntary efforts by companies to boost their value. Financial stocks, which have been regarded as underperforming stocks, or low price-to-book ratio (PBR) stocks, traded in negative territory. Hana Financial Group tumbled 5.94 percent to 55,400 won, and KB Financial Group sank 5.02 percent to 62,500 won. Hanwha Life Insurance dived 9.6 percent to 3,060 won, and Hyundai Fire and Marine Insurance plunged 7.07 percent to 32,200 won. Retailers were also among the losers, with Lotte Shopping shrinking 5 percent to 76,000 won and Shinsegae sliding 5.5 percent to 175,100 won. Top carmaker Hyundai Motor fell 2.05 percent to 239,000 won and its sister Kia dipped 3.21 percent to 114,600 won. The local currency closed at 1,331.1 won against the greenback, down 0.1 won from the previous session's close. Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 3.4 basis points to 3.340 percent, and the return on the benchmark five-year governm ent bonds lost 5.1 basis points to 3.379 percent. Source: Yonhap News Agency