Samsung Electronics shares hit year's second-lowest mark

Samsung Electronics, which holds one-fifth of the South Korean stock market’s value, has been suffering continuous price declines in recent weeks, hitting the second lowest mark of the year on Tuesday.

The stock price of the world’s largest chipmaker fell as low as 78,400 won ($68.30) earlier on Tuesday, before closing at 79,000 won, the second lowest level this year. Compared to 96,800 won six months ago, the price level is 18 percent lower.

On hopes for an economic recovery, market analyses have often projected the share value of the electronics giant to reach 100,000 won from early this year.

The shares dipped under 80,000 won this month amid market worries over the company‘s future.

The market remained negative over its business prospects, citing reports on Intel’s apparent attempt to eat into the chipmaking market by acquiring GlobalFoundries, a US-based semiconductor manufacturer. The rumored deal, if carried out, might hurt investors’ confidence in Samsung’s future, according to observers.

Samsung‘s delayed mergers and acquisitions, largely due to the absence of its head, have also been disappointing investors, they added. Vice Chairman Lee Jae-yong, the de facto leader of the conglomerate, is currently in jail.

Chinese rival Xiaomi has been narrowing the gap with Samsung in global smartphone shipments in the second quarter, local reports said, suggesting it might teeter the Korean company’s dominance in the smartphone market. Xiaomi took up 17 percent of global smartphone shipments, while Samsung accounted for 19 percent, Canalys Smartphone Analysis showed.

“To push Samsung’s share prices upward, there needs to be some positive news such as acquiring new fabless clients in non-memory semiconductors or a major M&A,” said Kim Kyung-min, an analyst at Hana Financial Investment.

Meanwhile, despite sluggish stock prices, Samsung Electronics remains the most sought-after pick by retail investors.

Retail investors bought 1.99 trillion won of shares in the first 20 days this month, according to data from Korea Exchange, the country’s stock market operator.

The number of small investors holding less than 1 percent in Samsung Electronics stood at 3.86 million as of March 30, adding some 1.7 million during the first quarter, according to the company’s quarterly report.

By Park Ga-young (gypark@heraldcorp.com)