Share turnover for Samsung Group, South Korea's largest conglomerate, jumped as investors acted on the announcements of affiliates sale and a stock buyback plan, accounting for a significant portion of trading in the local stock market, data showed Friday.
Samsung Group announced on Wednesday it will sell defense and chemical affiliates for 1.9 trillion won (US$1.72 billion) to shed non-core businesses. After the market closing on the same day, Samsung Electronics Co., the group's flagship unit, said it will buy back shares worth 2.2 trillion won, the first such step in seven years.
The latest moves raised market speculations that the family-run conglomerate is hastening group restructuring to transfer the managerial leadership from group chairman Lee Kun-hee to his son and two daughters.
Samsung Electronics, the nation's largest company by market capitalization, soared as much as 8.3 percent during Thursday's trading, the biggest intraday rise since January 2009, and closed with a 5.3 percent hike. Its daily trading turnover reached 1.83 trillion, taking up 20.92 percent of the total in the main Seoul bourse, according to the Korea Exchange (KRX).
Together with 15 other main affiliates, Samsung Group shares accounted for 40.83 percent of the total transaction of 5.17 trillion won in the KOSPI market, the bourse operator said.
Turnover of Samsung SDS Co., a key IT service unit that was listed on the Seoul bourse on Nov. 14, stood at 322.5 billion won, or 6.23 percent of the total, on Thursday. On the first day of trading of Samsung SDS, trading activities of Samsung Group shares accounted for 40.5 percent of the KOSPI.
Samsung Techwin Co., a defense arm that is set to be sold to another South Korean conglomerate Hanwha Group, recorded 144.5 billion won, or 2.79 percent, of the total transaction, data showed.
Samsung Techwin had a busy week as investors dumped its shares in huge amounts, with 4.72 million shares changing hands a day before the official sales announcement. Tuesday's volume hit a yearly record and was about 18 times more than the average trading volume this year, raising suspicions that some traders may have acted on leaked information about the sales plan.
Samsung Group shares, which had slumped earlier this year on dull earnings, were back in the spotlight as the powerful conglomerate with about 70 affiliates was seen taking steps for smooth wealth transfer from the ailing chief to his three children.
Lee Kun-hee has been hospitalized since mid-May after a heart attack.
Market watchers expressed optimism that Samsung Electronics'
buyback program will drive up its shares, though some remained cautious over its long-term prospects over the lagging handset business.
"Samsung Electronics' repurchase program will help push up the company's share price up a notch, but an earnest uptrend in share price will require a clear turnaround in the smartphone business," Park Young, an analyst at Hyundai Securities, said.
Claire Kim, an analyst at Daishin Securities, saw Samsung pushing its restructuring in a way that strengthens Samsung Electronics' influence within the group.
"Samsung Group's corporate governance structure is changing in an unexpected direction. Samsung Electronics is expected to exert more influence within the group," Kim said. (Yonhap)
