POSCO Group has won back the 8th place in the benchmark KOSPI market in terms of market capitalization as its share price rose for five trading days in a row.
POSCO saw its stock price increase 11.85 percent this month as it closed higher for five consecutive trading days from Sept. 5 to 11, according to the Korea Exchange (KRX) on Sept. 15. The figure rose 6.07 percent to 236,000 won (US$197.57) on Sept. 11, recording the second highest growth this year after 6.15 percent on Jan. 30. Accordingly, the group’s market cap came to 20.58 trillion won (US$17.23 billion), ranking eighth after Celltrion Inc. worth 21.69 trillion won (US$18.16 billion).
POSCO continued to show a poor performance due to a growing burden from production costs caused by higher iron ore prices in the first half of the year and was directly hit by concerns over the slowing of demand from the trade dispute between the United States and China. Therefore, the price of group’s shares had been on a downtrend. As the figure dropped to a new 52-week low of 201,500 won (US$168.69) early August, the total market cap decreased to 18.13 trillion won (US$15.18 billion), slipping to 11th spot.
However, institutional investors, mainly the National Pension Service, have continued to buy POSCO shares and foreigners have also started to buy the stock from Sept. 10 because they believed that the group’s stock price has gone down excessively.
POSCO is expected to continue to show poor performance until the third quarter. The group’s operating profit consensus in the third quarter comes to 1.03 trillion won (US$865.47 million), down 32.48 percent from a year earlier, according to market research firm FnGuide. However, market experts expect that steel companies which operate blast furnaces will see higher earnings starting from the fourth quarter because of the improvement in supply and demand from China’s reduction in steel supply and the decline in price of raw materials for blast furnaces.