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Seoul shares rise 0.9 pct as autos, techs fuel gains
June 18, 2013 / 7:11 AM / 4 years ago

Seoul shares rise 0.9 pct as autos, techs fuel gains

* Samsung Elec, Hyundai Motor lift markets higher

* Foreign investors sell for an eighth session

* STX Pan Ocean tumbles, STX Offshore & Shipbuilding rallies

SEOUL, June 18 (Reuters) - Seoul shares advanced on Tuesday as battered auto and technology heavyweights including Hyundai Motor and Samsung Electronics rebounded sharply.

The Korea Composite Stock Price Index (KOSPI) finished up 0.93 percent at 1,900.62 points, but the South Korean benchmark is still down 5 percent on the month.

“This is a technical rebound as shares are a bargain at their current level. The market is in process of firming its support at 1,900 points,” said Lim Soo-gyoun, a market analyst at Samsung Securities.

South Korean shares are currently traded at 12-month forward price earnings multiple of 8.9, compared with Taiwan’s 14 and Japan’s 13.4, Thomson Reuters StarMine data showed.

Foreign investors, however, were sellers of a net 145.7 billion won worth of stocks, offloading shares for an eighth straight session.

Samsung Electronics rose 1.5 percent, its biggest daily percentage gain in 2-1/2 weeks. LG Electronics shares advanced 4 percent and SK Hynix rose 4.3 percent.

Hyundai Motor shares finished up 3.8 percent after a recent streak of falls, helped by expectations of solid second quarter earnings, analysts said.

“Shares at the current level are attractive in terms of valuation. We also expect second quarter volume growth to be around 10 percent compared to a year before,” said Suh Sung-moon, an analyst at Korea Investment & Securities.

Hyundai Motor shares’ 12-month forward price earnings multiple was 5.7 compared with Japanese rival Honda Motor Co.’s 11.5, Thomson Reuters StarMine data showed.

Shares in STX Pan Ocean Co Ltd fell 15 percent after trading in the stock resumed on Tuesday. Trading had been halted after market close on June 5.

STX Pan Ocean is scheduled to undergo a debt workout program after court receivership was approved on Monday.

“STX Pan Ocean will have to take on capital reduction and debt equity swaps as part of the debt workout program. The shares are tanking today in expectation of those procedures,” said Park Eun-kyung, an analyst at Samsung Securities.

“The debt workout program by itself will also be a challenge,” Park said, adding that STX Pan Ocean’s current outstanding debt is estimated to be around 4.4 trillion won.

STX Offshore & Shipbuilding Co Ltd advanced 11 percent amid talk that an accounting firm in charge of due diligence for the debt-ridden shipyard had determined the company was worth a court-led debt workout programme.

The KOSPI 200 benchmark of core stocks was up 0.96 percent, while the junior KOSDAQ rose 1.86 percent higher.

Gainers outnumbered decliners 529 to 299.

Move on day +0.93 percent

12-month high 2,042.48 3 January 2013

12-month low 1,758.99 25 July 2012

Change on yr -4.8 percent

All-time high 2,231.47 27 April 2011

All-time low 93.10 6 January 1981 (Reporting by Jungyoun Park; Editing by Eric Meijer)

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