Seven out of 10 firms listed on South Korea's stock markets are expected to post improved earnings in the second quarter of 2014, helped by the government's economic stimulus plan, data showed Sunday.
According to the data compiled by market researcher FnGuide, 76 percent of the 167 listed firms for which three or more brokerage houses have offered earnings forecasts are expected to see their operating profit advance on-year in the April-June period.
"Despite the country's sluggish exports, domestic-oriented shares are gathering attention amid the government's stimulus policies," said Kim Sang-ho, a researcher at KDB Daewoo Securities Co.
Last week, the government said it would reform the country's overall regulatory system over the next three years in a bid to remove excessive red tape and bolster slumping corporate investment.
Analysts expected entertainment firms will gather ground, with operating profits of CJ CGV Co. rising 67.95 percent and NC Soft Corp. adding 70.31 percent over the cited period.
Retailers such as Daewoo International Corp. and LG International Corp. are also expected to see their operating profit improve at 72.98 percent and 63.05 percent, respectively, they added.
In contrast, analysts said export companies are anticipated to post weak earnings over the cited period, due to the falling overseas demands as well as the U.S. Federal Reserve's tapering of quantitative easing moves.
"There are no signs of an improvement in exports during the second quarter due to the slowing Chinese economy and falling demand from emerging markets," added Bae Sung-young, an analyst from Hyundai Securities Co.
The world's top smartphone maker, Samsung Electronics Co., is expected to see its second-quarter operating profit fall 2.08 percent on-year to reach 9.3 trillion won, with that of LG Electronics Inc. plunging 9.82 percent to 432.2 billion won. (Yonhap)