Samsung, LG Elec hit records on outlook, won
SEOUL, (Reuters) - Shares in South Korea's top electronics makers Samsung (005930.KS: Quote, Profile, Research) and LG (066570.KS: Quote, Profile, Research) jumped to fresh records on Thursday powered by strong earnings outlooks and the deepening weakness of the local currency.
"Their earnings are improving fast and the recent share price gains have yet to catch up the upgraded outlook," said Lee Sung-joon, an analyst at SK Securities.
"The government seems to be fine with the won's recent weakness and it will help electronics exporters a lot."
The won's value has fallen about 11 percent against the dollar so far this year, compared with a less than 1 percent loss for all of 2007. A softer won helps local exporters price their goods more competitively in foreign markets.
Samsung Electronics Co Ltd, South Korea's biggest stock, was up 1.36 percent to 748,000 won by 0252 GMT, also helped by expectations that a top management shakeup would reinvigorate the world's biggest maker of memory chips and liquid crystal display (LCD) screens.
The stock rose as much as 2 percent to hit a lifetime high of 753,000 won.
Samsung announced on Wednesday a management reshuffle under which CEO Yun Jong-yong is to be replaced by Lee Yoon-woo, whose previous stint as head of Samsung's chip unit is seen positive.
LG Electronics Inc jumped 4.52 percent to 162,000 won, after rising 5.8 percent earlier to hit record 164,000 won.
Led by the two heavyweights, Seoul's benchmark Korea Composite Stock Price Index (KOSPI) was up 1.53 percent, hitting a 5-½ month high.
"Institutions have snapped up LG shares for the past few days over LG's upbeat earnings prospects," said Lee Min-hee, an analyst at Dongbu Securities. "Its handset operation is also a favourable factor."
Analysts expect Samsung and LG, the world's second- and fourth-biggest mobile phone maker respectively, to continue outperform global rivals such as Motorola (MOT.N: Quote, Profile, Research) and Sony Ericsson (6758.T: Quote, Profile, Research) (ERICb.ST: Quote, Profile, Research) with improved product lineups and cost competitiveness.
As of Wednesday's close, Samsung shares had gained 33 percent this year and LG 55 percent, easily outstripping the wider market which had lost 3 percent since the start of the year.
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"Their earnings are improving fast and the recent share price gains have yet to catch up the upgraded outlook," said Lee Sung-joon, an analyst at SK Securities.
"The government seems to be fine with the won's recent weakness and it will help electronics exporters a lot."
The won's value
Samsung Electronics Co Ltd, South Korea's biggest stock, was up 1.36 percent to 748,000 won by 0252 GMT, also helped by expectations that a top management shakeup would reinvigorate the world's biggest maker of memory chips and liquid crystal display (LCD) screens.
The stock rose as much as 2 percent to hit a lifetime high of 753,000 won.
Samsung announced on Wednesday a management reshuffle under which CEO Yun Jong-yong is to be replaced by Lee Yoon-woo, whose previous stint as head of Samsung's chip unit is seen positive.
LG Electronics Inc jumped 4.52 percent to 162,000 won, after rising 5.8 percent earlier to hit record 164,000 won.
Led by the two heavyweights, Seoul's benchmark Korea Composite Stock Price Index (KOSPI) was up 1.53 percent, hitting a 5-½ month high.
"Institutions have snapped up LG shares for the past few days over LG's upbeat earnings prospects," said Lee Min-hee, an analyst at Dongbu Securities. "Its handset operation is also a favourable factor."
Analysts expect Samsung and LG, the world's second- and fourth-biggest mobile phone maker respectively, to continue outperform global rivals such as Motorola (MOT.N: Quote, Profile, Research) and Sony Ericsson (6758.T: Quote, Profile, Research) (ERICb.ST: Quote, Profile, Research) with improved product lineups and cost competitiveness.
As of Wednesday's close, Samsung shares had gained 33 percent this year and LG 55 percent, easily outstripping the wider market which had lost 3 percent since the start of the year.
source
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