Shares of South Korea's tech heavyweight Samsung Electronics Co. may take a hit some time before the second half of this year, stoking concerns the local stock market could reel from the fall, if realized, given the company's
big market proportion, analysts said Sunday.
Shares of the world's largest mobile phone maker closed at 1,517,000 won (US$1,342) on Friday, down 1.49 percent from the previous session, according to the Korea Exchange (KRX).
The market bellwether had dropped to the 1,180,000 won range in August 2012 due to the spate of patent lawsuits against U.S. Apple Inc., before rebounding to the 1,500,000 won mark in the last four months.
But analysts have raised the specter that the top-cap company will likely take a slide in May or June, since the current share price has already reflected its second-quarter earnings that are expected to hit another record.
"There's a view that Samsung Electronics' shares could tumble in those months based on a forecast that its earnings will fall after reaching a peak in the second to third quarter," said Oh Seung-hoon, an analyst at Daishin Securities Co.
Experts said such an outlook on the tech blue chip raises concerns its steep fall could rattle the local stock market. Samsung Electronics currently accounts for 20 percent of the total market cap, meaning the movement of South Korea's main bourse hinges on the tech firm's direction.
Market watchers have raised concerns that too large a proportion of the South Korean stock market is held by IT companies, which currently take up nearly 30 percent of the total market cap. They warned that a slowdown in the sector can always result in an overall slump in the stock market.
The total market capitalization of the Seoul bourse stood at 1,116.3 trillion won as of Friday, according to the KRX. (Yonhap News)
