Samsung Electronics continued its rally on the stock market, Wednesday, hitting a record high during the day’s trading, amid rosy expectations on its plan over converting into a holding firm and increasing dividends for its shareholders.
The company’s stock price closed at 1,772,000 won, up 1.37 percent from 1,748,000 won a day earlier. During the day’s session, the price per share soared to 1,774,000 won, surpassing the previous record of 1,760,000 won. Buoyed by the surge, the company’s market cap stood at 249.28 trillion won.
This amount accounts for about 20 percent of the market cap of the entire KOSPI. Following Tuesday’s buying binge led by institutional investors, foreigners, such as Credit Suisse, Morgan Stanley, Nomura and Macquarie, led the stock price to surge even higher with a buying spree on Wednesday.
The move weathered a parliamentary investigation in which Samsung Group Vice Chairman Lee Jae-yong was questioned over allegations that the company earned support from the National Pension Service for its controversial merger of two affiliates in 2015 in exchange for its cash donation to Choi Soon-sil, the central figure of the corruption scandal involving President Park Geun-hye.
On Nov. 29, Samsung Electronics released its plan containing details on its transformation into a holding firm and increasing the total amount of shareholder dividends to about 4 trillion won ($3.42 billion) this year, up 30 percent from last year’s 3.1 trillion won.
Observers say the surge can be interpreted as the market responding to Samsung’s efforts to strengthen shareholder value, with some expecting the company’s operating profit in the fourth quarter to reach 8.3 trillion won.
“The semiconductor and smartphone sectors will lead with huge growth in the fourth quarter,” said Lee Jeong, an analyst at Eugene Investment & Securities.
Earlier on Wednesday, the U.S. Supreme Court’s ruling in favor of Samsung in its smartphone patent suit with Apple also led the surge of the company’s stock price.
In a unanimous ruling, the eight justices reversed an appeals court ruling that Samsung should pay $399 million penalty to Apple for using three patented technologies. As the justices sent the case back to the appeals court, the amount that Samsung has to pay will likely decline.