Record High Stock Price
The Samsung Electronics share price hit a record high for the year on May 1, surpassing 1.33 million won (US$1,156) in six months.
With the latest bullish trend, the company alone accounts for 15.17 percent of the aggregate market value of the entire Korea Composite Stock Price Index (KOSPI). The positive outlook is growing that the operating profits of Samsung Electronics in the second quarter will reach 7 trillion won (US$5.87 billion) again in three quarters on the back of good performance in its smartphone business which is the cash cow of the company.
On June 1, the stock price of Samsung Electronics increased 3.17 percent, or 41,000 won (US$34.38), to 1,333,000 won (US$1,118) from the previous day. It is the highest closing price in six months after recording 1,335,000 won (US$1,120) on November 26 last year. As its market capitalization has exceeded 190 trillion won (US$159.33 billion), it now accounts for 15.17 percent of the aggregate market value of the entire KOSPI, the second highest figure after 15.34 percent on December 16 last year.
The rosy market expectations for its performance in the second quarter is leading to the increase in the Samsung Electronics share price. According to financial information provider WISEfn, domestic securities firms estimated that Samsung Electronics would post 6.77 trillion won (US$5.68 billion) in operating profits in the second quarter. The figure grew nearly 1 trillion won (US$838.57 million) from 5.81 trillion won (US$4.87 billion) three months ago. In particular, Samsung Securities, Korea Investment & Securities and Mirae Asset Daewoo recently forecasted that Samsung Electronics’ operating profits in the second quarter would reach 7.15 trillion won (US$6 billion), 7.05 trillion won (US$5.91 billion) and 7.03 trillion won (US$5.89 billion), respectively.
The supply and demand of foreigner investors and institutional investors is positive as well. As the entry of China’s American Depositary Receipt (ADR) into the Morgan Stanley Capital International (MSCI) Emerging Markets Index has been completed, the balance of supply and demand has improved. Foreign investors sold a net 190 billion won (US$159.33) of Samsung Electronics shares on the previous day but bought a net 77.6 billion won (US$65.07 million) of it on the next day. Moreover, institutional investors purchased its stocks for two days in a row.