Seoul shares inch up on strong Daelim Industrial results, domestic buying

Wed Apr 17, 2013 2:59am EDT

Related Topics

* Daelim Industrial's Q1 profit restores some confidence

* Benchmark supported by domestic investors' net buying

* Celltrion down 13.4 pct after previous session's gains

By Joyce Lee

SEOUL, April 17 (Reuters) - Seoul shares inched up on Wednesday as the beleaguered construction sector received a boost from better-than-expected first-quarter profits by Daelim Industrial.

The benchmark Korea Composite Stock Price Index (KOSPI) closed up 0.1 percent at 1,923.84 points, hovering for the fourth session near the 1,920 mark, or roughly where KOSPI shares' total price equals their trailing twelve-month book value.

"There was a lot of doubt about first-quarter corporate earnings, especially concerning construction firms, but Daelim Industrial's strong results restored investor confidence somewhat," said Lim Jong-pil, an analyst at Hyundai Securities.

Shares in the construction sector closed up 0.4 percent, after retreating as much as 4.9 percent during trading, as Daelim Industrial beat market expectations with first-quarter operating profits of 124 billion won ($111.20 million) after mid-session.

The outlook for South Korean builders had soured since last week as GS Construction and Samsung Engineering reported first-quarter operating losses of 219.8 billion won and 535 billion won, respectively.

"Daelim stuck to orders it knows how to do in a region it's familiar with -- the Middle East. But Samsung Engineering and GS Construction hit a learning curve as they expanded into new regions such as the U.S and took up unfamiliar projects," said Kang Seung-min, an analyst at NH Investment & Securities.

Shares in Daelim Industrial rose 7 percent, although Samsung Engineering closed flat and GS Construction slid 2.9 percent.

Overall, local institutional and retail investors bought a net 239.7 billion won worth of KOSPI shares, which offset foreign selling and underpinned the main board. Gainers outnumbered decliners 414 to 397.

Other large-caps were mixed, with index heavyweight Samsung Electronics closing down 0.7 percent.

Among other notable movers, shares in biopharmaceutical firm Celltrion Inc plunged 13.4 percent, after closing up 5.1 percent in the previous session. Shares in affiliate Celltrion Pharm Inc dropped by the daily trading limit of 15 percent.

Trading has been volatile after Celltrion's president said on Tuesday he will seek a buyer among multinational drug makers for his controlling interest in the biotechnology company.

Celltrion is the biggest and most profitable firm in the country's second-tier KOSDAQ market, with a market capitalisation of $4.2 billion.

The KOSPI 200 benchmark of core stocks closed down 0.1 percent, while the junior KOSDAQ also edged 0.1 percent lower.

Move on day +0.1 percent

12-month high 2,031.10 2 January 2013

12-month low 1,769.31 25 July 2012

Change on yr -5.3 percent

All-time high 2,231.47 27 April 2011

All-time low 93.10 6 January 1981 ($1 = 1115.0750 Korean won) (Editing by Shri Navaratnam)

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