Samsung Electronics shares start trading after its 50:1 stock split

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거래 재개된 삼성전자 액면분할 효과

Following three days of zero trading,… Samsung Electronics has returned to the nation’s main bourse.
This comes after the tech titan’s decision in January… to do a stock split.
Cha Sang-mi reports from the Korea Exchange.

“It was day one of Samsung Electronics’ shares being back on the market after the company split its stock 50-to-one. Despite the high expectations, Samsung’s share prices fell by over 2 percent, pulling down the benchmark KOSPI.”

Some experts say this is probably temporary.

“The drop today could have happened because there were many expectations on the stock uptick. This could be controlled, but there are concerns that Samsung’s management will eventually deteriorate as the government seems to be exerting pressure on the board.”

Whereas financial analysts say the fall on the first day is more relevant to the company’s fundamentals and not necessarily the result of the stock split event.

Korea’s tech giant announced a 50:1 stock split in January, saying the decision would make investing in the company “more accessible and provide dividends to a wider range of investors.”
Some analysts say Samsung’s move will drive the stock price to rerate the Korean stock market given the fact that local investors will be much easier to access Samsung shares, which take up over 30 percent of Korea’s stock exchange.

“One share is almost 2,500 dollars, which is the average monthly salary for a retail investor. So it’s very difficult to approach this stock. So, the split will encourage a lot more people to invest in Samsung.”

Yet some economists say, while it’s almost no-brainer that for the next few days Samsung stock prices will shoot up, the impact is rather worrisome for the nation’s stock market in the long run.

“As the Samsung prices goes up and take a bigger share of the Korean stock market that means 30 to 40 percent of Korean stock market will be controlled by just one firm. So whenever Samsung has a bad turn, it will make the entire Korean stock market unattractive.”

The economist warned Samsung Electronics’ strategy could possibly distort the market and allow one firm to wield too much influence over the entire market.
Cha Sang-mi, Arirang News.

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