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Seoul shares to be swayed by Q3 earnings, central banks

All Headlines 10:00 October 08, 2016

SEOUL, Oct. 8 (Yonhap) -- South Korean shares are expected to be swayed by a mixed batch of third-quarter earnings and monetary policies at home and abroad in the coming week, analysts said Saturday.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 2,053.8 points on Friday, up 0.5 percent from a week ago.

Local shares started on a weak note after hawkish comments from the Federal Reserve muted investor sentiments on Tuesday amid rising concerns over a "hard" exit by Britain from the European Union.

Samsung Group shares rallied to boost the overall market after U.S. hedge fund Elliott Management on Thursday urged Samsung Electronics, the crown jewel of South Korea's top conglomerate, to split itself into holding and operating firms and pay a special dividend. The activist fund also demanded the tech giant to list its operating company on NASDAQ.

Shares of Samsung Electronics hit a record high of 1,706,000 won on Friday, buoyed by hopes for the improved governance structure and upbeat third-quarter earnings guidance despite a global recall of its Galaxy 7 Note smartphone.

Tech, insurance and equipment outperformed the market, while bio, engineering and cosmetics were at the bottom.

Analysts said investors will rearrange their portfolio depending on the earnings reports to be released in the coming weeks, while keeping eyes on monetary policies in South Korea and the United States.

"While analysts have downgraded the third-quarter earnings estimates, shares related to the Samsung Group are expected to draw attention following Elliot's proposal calling for more shareholder-friendly policies," Kim Byung-yeon, an analyst at NH Investment & Securities, said.

The U.S. Federal Reserve releases its September minutes on Wednesday, and the Bank of Korea sets its key interest rates on Thursday. South Korea's monthly export data and U.S. consumer sentiment report are slated for Friday.

ejkim@yna.co.kr
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