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Seoul shares see largest slide in 11 months; Samsung Elec dives 6 pct
June 7, 2013 / 7:36 AM / 4 years ago

Seoul shares see largest slide in 11 months; Samsung Elec dives 6 pct

* Galaxy S4 sales in Q3 seen worse than expected

* Largest foreign selloff in nearly 22 months

* STX Pan Ocean applies for court receivership; affiliates plunge

* Signs of N.Korea thaw boost related shares

By Joyce Lee

SEOUL, June 7 (Reuters) - South Korea’s benchmark index fell the most in nearly 11 months on Friday as heavyweight Samsung Electronics lost 6.2 percent after brokerages raised concern about weaker demand for its latest smartphone.

The Korea Composite Stock Price Index (KOSPI) fell 1.8 percent to 1,923.85 points, the biggest daily slide since July 23, 2012, and the lowest closing since April 23, 2013.

Accounting for about 17 percent of KOSPI’s market capitalisation, Samsung Electronics shares’ plunge hit hard, driven by foreign selloffs after JP Morgan cut its price target from 2.1 million Korean won ($1,900) to 1.9 million won on Thursday.

Samsung Electronics shares closed at 1.427 million won on Friday. The decline marked the biggest daily percentage loss since August last year, when the South Korean smartphone giant lost a U.S. patent lawsuit to Apple Inc.

“Our supply chain checks show monthly orders (of Galaxy S4) have been cut 20-30 percent to 7 to 8 million units (from 10 million) starting July and 3Q13 due to weak demand in EU and the domestic market,” wrote JP Morgan analysts JJ Park and Jay Kwon in an investors’ report.

Foreign investors net sold some 953.6 billion Korean won in KOSPI shares at closing, in the largest foreign selloff since August 10, 2011.


Other blue chips compounded the decline with auto and steel sectors losing ground. Hyundai Motor Co fell 1.2 percent while POSCO fell 0.5 percent.

Shares in STX Group units such as STX Corp and STX Offshore & Shipbuilding Co Ltd extended losses, plunging as much as 14.7 percent.

This was after shipping affiliate STX Pan Ocean Co Ltd said on Friday it had applied for court receivership at the Seoul Central Court.

Trading in STX Pan Ocean was halted after the market close on Wednesday, as main creditor Korea Development Bank passed on acquiring the debt-ridden shipper after no suitors emerged in an open bidding.

Shares in Hyundai Merchant Marine Co Ltd bucked trends by rising 14.9 percent, as signs of a thaw in relations between North and South Korea boosted investor sentiment.

North Korea said it would reopen a Red Cross hotline with South Korea on Friday and invited Seoul officials for talks, a further sign of thawing inter-Korean relations after ties had been ruptured for months.

Hyundai Merchant Marine is the majority shareholder of unlisted Hyundai Asan Corp, operator of the currently suspended tours of Mount Kumgang on the east coast of North Korea.

South Korean firms that have production facilities in the presently-closed Kaesong industrial zone in North Korea also gained, with watch & jewellery maker Romanson Co Ltd rising 14.7 percent.

Decliners outnumbered gainers 543 to 275.

The KOSPI 200 benchmark of core stocks closed down 2.1 percent, while the junior KOSDAQ slid 2.4 percent.

Move on day -1.8 percent

12-month high 2,042.48 3 January 2013

12-month low 1,758.99 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 = 1115.8500 Korean won) (Additional reporting by Hyunjoo Jin; Editing by Sanjeev Miglani)

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