Seoul shares rose 1.3 percent on Monday, extending gains after a slow start as the news of Samsung Life's IPO and strong prospects for the sale of Daewoo Engineering boosted shares of their stakeholders. Retail and construction shares rose while select technology firms such as Hynix Semiconductor and LG Electronics rebounded in the afternoon.
"The news of Samsung Life IPO helped, while gains in other Asian markets supported the mood," said Lee Seung-woo, an analyst at Daewoo Securities. "But caution is still needed. Today's gains may look strong amid the recent sluggishness but it remains to be seen whether the current range could be broken." The Korea Composite Stock Price Index added 20.48 points to close at 1,592.47 points.
Investors are keeping an eye on the Chinese yuan, whose moves could affect South Korean exports and the local won currency's direction. US President Barack Obama is expected to discuss the yuan during his first visit to China, which began on Sunday. Daewoo Engineering & Construction jumped 8.14 percent to 13,950 won ($12.09) as the Wednesday deadline for final bids on its controlling stake approaches. Its shareholders Kumho Industrial and Kumho Tire surged 11.65 percent and 5.75 percent, respectively.
"Expectations are running high that Kumho may be able to sell Daewoo Engineering at 22,000 won per share or above," said an NH Investment & Securities analyst Kang Seung-min. "Better price means less investment loss for Kumho Group units. And for Daewoo, it could be better off with cash-abundant investors rather than a small chaebol with limited funds," he said, referring to foreign investors that have shown interest.
Samsung Life, South Korea's top life insurer, said on Monday it was aiming to go public in the first half of next year, joining a series of planned insurance offerings in Asia. Shinsegae, which owns 13.6 percent of Samsung Life, rose 4.2 percent. Other shareholders CJ Corp and CJ Cheiljedang jumped 8.97 percent and 6.55 percent, respectively.
Local retail giant Lotte Shopping finished up 4.45 percent and Hyundai Department Store gained 3.18 percent. Local department store operators have been outperforming discount stores and other rivals because of strong demand for high-end goods. Technology shares led the market higher in the afternoon, with Hynix ending up 4.51 percent and LG Electronics climbing 3.45 percent. Samsung Electronics added 2.66 percent.
Doosan Heavy Industries & Construction rose 2.31 percent after company executives said it would invest more in clean energy and that it expected to win nuclear power equipment deals in the United States and China. Shipping company STX Pan Ocean soared 7.56 percent and STX Offshore & Shipbuilding rose 2.39 percent after STX Pan Ocean ordered iron ore carriers worth 1.02 trillion won from STX Offshore.
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