[THE INVESTOR] Samsung Electronics, which is suffering from a recall of its latest phablet, lost more than 6 percent in its share value Monday, dragging down Korea’s benchmark stock index.
Combined with North Korea’s nuclear provocation woes and higher probabilities of a US interest rate hike in September, the Kospi tumbled 2.28 percent to 1,991.48. points.
The world’s largest smartphone maker and market bellwether of Seoul’s Kospi closed at 1,465,000 won, down 6.98 percent from the previous trading session on Friday.
The company’s shares slid 10.54 percent as soon as the market opened on the day, dragging down the stock index to below the 2,000 mark.
The issue of the battery defect in the newest Galaxy Note 7 was expected to be well resolved as the company decided to recall all of 2.5 million phones that were pre-sold on reservations. But recommendations made by 10 governments around the world to suspend the use of the Samsung phablet are making the issue more complicated than expected.
“The issue has been graver than the company thought,” said Hwang Min-seong, an analyst at Samsung Securities. “Earlier, the company was forecast to see about an 800 billion won decline in its annual earnings, but the figure could exceed 1 trillion won considering the current situation.”
In August, Samsung hit a record high of 1,694,000 won on favorable prospects for the latest product and positive forecasts for its semiconductor business, drawing up the Kospi above the 2,060 mark. The index peaked to 2,073.89 during the trading last week, but made a sharp fall this week on bad news about Samsung and the North’s nuke test.
“Samsung Electronics and the North Korean nuke test are the two biggest issues weighing down the Kospi,” said Lee Kyung-min, an analyst at Daishin Securities. “Throughout this week, the Kospi may hover below the 2,000 mark.”
By Song Su-hyun/The Korea Herald ()
