The price of Samsung Electronics shares dipped below 50,000 won (US$46.75) during intra-day trading for the first time after the company resumed on the country's main bourse. The effect of its stock split also seemed to disappear in a few days, though it attracted great attention in the market.
Samsung Electronics Co. barely closed at 50,100 won (US$46.84) on May 14, down 1,200 won (US$1.12) or 2.34 percent, from the previous trading day. Its share prices fell below 49,900 won (US$46.66) during intra-day trading. The closing price decreased more than 5 percent from the basis price of 53,000 won (US$49.56) per share after the stock split.
The securities industry say that Samsung Electronics saw its stock prices fall after the stock split due to supply and demand. In particular, the amount of Samsung Electronics’ short selling skyrocketed to 2.6 million shares on the 11th, accounting for over 25 percent of the company’s total trading. In short, there were many foreign and institutional investors who bet on the fall in Samsung Electronics’ share prices.
Samsung Electronics ranked first in terms of total amount of short selling between the 4th to the 11 in both KOSPI and KOSDAQ market with 7.9 million shares, showing a huge gap with No.2 SK Networks Co. with 2.8 million shares. Oh Hyun-sk, head of the investment strategy center at Samsung Securities Co., said, “Considering the fact that another chipmaker SK Hynix Inc. had some 2 percent share of short selling over the same period, Samsung Electronics’ growth in short selling is assumed to be a problem of supply and demand rather than corporate fundamentals.”
Some also say that the price of Samsung Electronics shares is hit by a capital outflow to emerging markets owing to the recent stronger U.S. dollar. Samsung Electronics came in second in terms of share of Morgan Stanley Capital International (MSCI) Emerging Markets Index with 4 percent after China’s Tencent.
The volume of Samsung Electronics’ stock trading, which skyrocketed after the stock spilt, returned to the level before the stock spilt in days. The volume and amount of Samsung Electronics’ trading on the 14th recorded at 14,838,101 and 745,968,390,000 won (US$697.17 million). Without taking account of the stock split effects, the daily average trading volume of Samsung Electronics is 296,762 shares, which is about the same with 294,185 shares of that of this year before the stock split. This is in stark contrast with the fact that Samsung Electronics’ trading volume and amount reached a record high with 39,565,391 shares and 2,078,017,920,000 won (US$1.94 billion) on the 4th, the day the company was relisted after the stock split.
Up until now, the effect caused by the stock split seemed to disappear. Hwang Min-sung, an analyst at Samsung Securities, said, “Many experts say that the growth of individual investors’ purchases is positive but a new favorable factor is needed to increase the share of Samsung Electronics in the changeful market including the inter-Korean issue.”