Samsung Electronics Returns To Market After Stock Split

SEOUL, May 4 (APP - UrduPoint / Pakistan Point News - 5th May, 2018 ) :The unprecedented stock split of samsung Electronics Co. spurred trading activity on Friday, though the share price drifted lower, the bourse operator said.

Stock trading of South Korea's tech giant resumed on Friday after a three-day hiatus to lower its face value from 5,000 won (US$4.64) to 100 won. Accordingly, the basis price was 53,000 won per share as its pre-split final price logged on April 27 was 2,650,000 won.

After fluctuating between positive and negative terrain during the first trading session, the tech behemoth shed 2.08 percent to finish at 51,900 won. Trading volume surged as the stock split drew more investors, with the number of common stocks growing 50 times to more than 6.41 billion.

The number of Samsung shares traded throughout the day hit a record high of 39.33 million compared to an average of 294,000 shares per day before the stock split, according to the Korea Exchange (KRX).

Turnover nearly doubled to 2.07 trillion won ($1.92 billion) on Friday, accounting for 19 percent of the Korea Composite Price Index's (KOSPI) total turnover.

Before the split, the figure came to less than 10 percent on average, the KRX said.

"The increase in the number of investors and fresh liquidity thanks to the stock split are forecast to have positive impacts on share prices," Lee Seung-woo, an expert at Eugene Investment & Securities, said.

The stock split aimed to enhance shareholders' value on the heels of robust earnings last year by boosting accessibility by small investors to what were formerly "emperor shares" due to their high price.

In fact, retailers scooped up the Samsung shares on Friday, though their buying was not enough to fend off the selling binge by institutions and foreigners who moved to lock in profit-taking from rallies in the previous two sessions.

"The reduction in the price per share helped lower the entry bar for retailers and naturally downscaled the proportion of foreign entities. That would lower risks for Samsung's governance structure," Paik Won-jae, an expert at Mirae Asset Daewoo Co., said.

Overall, the index sank 1.04 percent on Friday to 2,461.38 amid renewed concerns over trade frictions between the United States and China.