The South Korean won fell against the dollar on Friday, as US private equity fund Lone Star sold a stake in Korea Exchange Bank (KEB) and on supplies related to recent stock sales by foreign investors.
But the won cut its losses on exporters' demand and after the country's shipbuilders received overseas orders, which raised expectations for greater won demand. The local currency continued rising against the yen to another nine-and-a-half year high as investors sustained their sales of the Japanese unit for higher yielding assets.
The won was last quoted at 927.9/8.3 per dollar, compared to its previous closing bid of 926.5. It was virtually steady for the week. The South Korean unit briefly touched a session high of 7.4716 against the yen, its strongest since October 24, 1997.
"Supplies related to Lone Star's KEB sale outpaced sizeable demand from exporters, pushing down the won a bit further," said a foreign bank dealer. Lone Star's sales of assets in South Korea may keep pressing the won for a while, but demand for the unit from exporters and demand related to recent sale of a stake in Woori Financial Group are expected to provide some relief, dealers said.
Lone Star sold a 13.6 percent stake in KEB in an increased block trade, raising $1.28 billion, a source said on Friday, as the US firm begins to exit an investment burdened by legal challenges.
Hana Financial Group said it had bought KEB shares, as did as credit union National Agricultural Co-operative Federation. Separately, South Korea's Woongjin Holdings Co Ltd said it would buy local builder Kukdong Engineering and Construction for $712 million from Lone Star.
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