Seoul stocks extend rally as uncertainty eases

Dealers look at an electronic board at KEB Hana Bank headquarters in Seoul, Tuesday. The KOSPI closed at 2,133.78 points, up 0.76 percent, the highest since May 27, 2015, when it reached 2,134.95. / Yonhap

Samsung Electronics hits all-time high on foreign buying

By Park Hyong-ki

Seoul stocks rallied to a 22-month high as political uncertainty eased following the Constitutional Court’s ruling to remove President Park Geun-hye, analysts say.

The KOSPI closed at 2,133.78, up 0.76 percent on Tuesday, the highest since May 27, 2015, when it hit 2,134.95. The tech-heavy KOSDAQ dropped 0.24 percent to 614.12.

Foreign net-buying of major blue chips, including Samsung Electronics, helped boost Seoul stocks as they turned bullish after Park was ousted.

“An inflow of foreign capital into the stock market could continue as political uncertainty eased,” said Sun Sung-in, an analyst at Shinhan Investment.

Moody’s Investors Service gave a positive sovereign credit rating to Korea, saying that its next leader is expected to provide “fresh impetus for reform, although success in implementing policies will depend partly on the size of the parliamentary majority.”

Foreign investors bought Seoul shares worth more than 400 billion won on Tuesday.

Their net-purchase of KOSPI stocks stood at around 4 trillion won, according to the Korea Exchange.

The market capitalization of stock holdings by foreigners accounts for about 36 percent of the total.

Samsung Electronics rallied to a record, breaking its previous 52-week high of 2,049,000 won, on a foreign buying spree.

It reached above 2,070,000 won during intraday trading Tuesday.

Korea’s largest tech share closed at 2,068,000 won, up 1.87 percent.

Analysts are painting a rosy picture of the company on the back of a positive outlook for its memory chips and new smartphone.

The company is expected to launch Samsung Galaxy S8 next month.

“Its chip business will gain further momentum on the commercialization of driverless cars and artificial intelligence,” said Lee Soon-hak, an analyst at Hanwha Investment & Securities.

Also, hopes are running high on Samsung Electronics improving its governance.

Samsung Electronics Chief Financial Officer Lee Sang-hoon said that it will pursue its plan to change it into a holding company structure as promised.

“Regardless of issues concerning the dismantling of the Samsung Group, Samsung Electronics’ plan to change into a holding company is under consideration as it was a promise made to our shareholders,” Lee said.

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