Outlook for Samsung Electronics's share price

Foreign securities firms are releasing a negative outlook for Samsung Electronics. Foreigner-holding shares in Samsung Electronics have been around 50 per cent since last April. The share amounted to 53.82 per cent in the early this year but the percentage dropped to 50.58 per cent on August 14 and 50.76% on September 4 amid foreign investor's selling spree, the lowest point since 50.53 per cent in February 2000.

Citi Securities edged down its investment outlook for the company from 'buying' to 'retaining' on the ground that the company's profitability will deteriorate next year after hitting the ceiling in the fourth quarter. It explained the bad profitability is contributed to the expected weak demand in D-ram and mobile phones over sluggish world economy and to over-supply of NAND Flash.

Macquarie Securities advised "the market condition for Samsung Electronics' backbone products is not favorable," and "given the recent rally of the company stock, now is the time for investors to start realizing their profits."

It is contrary to domestic securities' rosy projections for the company.

Lee, Min-hee, researcher at Dong-bu Securities, points out "the company's three mega products, semiconductor, LCD, and mobile phone, successfully made a turnaround in August so there are still room for the stock price to continue its upward trend."

Foreigners' share-holding of the company crossed 50 per cent for the first time in 1999 and once slid to less than 40 per cent when IT bubble busted and other business bad incidents in that year. On February 25 the next year, the number rose to over 50 per cent and ever since it stayed over 50 per cent for 6 years and 7 months.

Foreign investors have been selling about 4.75 m shares of the company this year while institutional investors have been buying up 2.46 shares and Samsung Electronics has been stocking up 2.6 m shares.

Some expect that if this trend continues foreign ownership of the company might be reduced to 40 per cent in the foreseeable future.

Meanwhile Samsung electronics ended at W656,000 per share on September 4, up 3000 won or 0.45 % from a day ago.