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KOSPI Fell below 2,000 Points with Samsung Electronics losing 6.98%
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KOSPI Fell below 2,000 Points with Samsung Electronics losing 6.98%
  • By Jung Suk-yee
  • September 13, 2016, 02:30
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On September 12, the KOSPI fell 2.28% from the previous session to close at 1,991.48 points.
On September 12, the KOSPI fell 2.28% from the previous session to close at 1,991.48 points.

 

The stock price of Samsung Electronics plummeted by 6.98%, dipping below 1.5 million won per share, on September 12 due to the Galaxy Note 7 battery issue. It started 5.4% below the previous session’s closing price and lost 7.56% during the session and the company lost 15 trillion won of its market cap on September 12 alone. Such a rapid decline was for the first time in more than four years. During the past two sessions, 24.65 trillion won disappeared from the market cap of the company. Specifically, the common stock market cap dropped to 207.5456 trillion won compared to September 8 and the loss increases to 28 trillion won when preferred shares are included in the calculation.

Under the circumstances, securities companies are lowering their estimates of Samsung Electronics’ operating profit for this year. KTB Investment & Securities reduced its estimate for the third quarter from 8.2960 trillion won to 6.9331 trillion won and Shinhan Investment Corporation, Korea Investment & Securities and Dongbu Securities adjusted theirs from over eight trillion won to seven trillion won or so.

As recently as last month, they used to predict that Samsung Electronics would reach 200 trillion won in sales and 30 trillion won in operating profit for the first time in three years this year. However, KTB Investment & Securities more recently lowered its annual operating profit estimate from 31 trillion won to approximately 29 trillion won, mentioning that the recall of the Galaxy Note 7 and a decline in its sales would drag down the H2 operating profit of the IT & Mobile Division of Samsung Electronics by about 1.7 trillion won compared to previous estimates.

Likewise, the Korea Composite Stock Price Index (KOSPI) dipped below 2,000 points in two months, mainly led by the stock price of Samsung Electronics and net selling by foreign investors. The index lost 2.28% to close at 1,991.48 points on September 12. Concerns over the possibility of an interest rate hike by the Fed negatively affected the index, too.