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Seoul shares retreat but Samsung Card shines

SEOUL : Seoul shares fell on Wednesday, with investors remaining cautious as international alarm over the eurozone debt

Published September 14, 2011 Updated September 14, 2011 04:28am

2 min

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By Shoaib Ur Rehman

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The Korea Composite Stock Price Index (KOSPI) was down 0.91 percent at 1,796.50 points as of 0114 GMT.

Analysts said mounting worries about Europe amid the ongoing debt crisis were keeping investors at bay.

"Discussions in Europe are very much political in nature, and this is something that market perceives as an uncertainty," said Y.S. Rhoo, a market analyst at Hyundai Securities.

International alarm over Europe's debt crisis hit new heights on Tuesday, with US President Barack Obama pressing the bloc's big countries to show leadership as talk of a Greek default escalated and markets heaped pressure on Italy.

Shares in Samsung Card outperformed, rising 2.2 percent. after the company said it planned to sell a 20.64 percent stake in unlisted affiliate Samsung Everland through a block deal or initial public offering.

Local media reports estimate the deal will be worth more than 1 trillion won ($928 million).

"News of the stake sale points to capital gains, which is positive for Samsung Card shares. We see it outperforming despite most financial shares tanking today," said Hwang Seok-kyu, an analyst at Kyobo Securities.

But falls in banking stocks weighed, with KB Financial Group dropping 2.9 percent and Shinhan Financial Group shedding 1.7 percent.

Banks were hit by the "issue of renewed sovereign debt fears in the eurozone, and sharp falls in the domestic currency are an added negative," said Shim Kyu-sun, an analyst at HI Investment & Securities.

Korean Air Line declined almost 4 percent after a ratings downgrade and target price cut from Goldman Sachs.

Goldman Sachs downgraded Korean Air to "Sell" from "Buy" and also lowered its 12-month target price by nearly 50 percent to 41,800 won from the previous 77,800 won.

"In our view, an anticipated slowdown in developed market growth and the knock-on negative impact on trade, as well as corporate travel budget cuts could weigh on Korean Air Line's future profitability," the US investment bank said in a report on Wednesday.

Elsewhere shares in Samsung Electronics eased 1.5 percent after Apple Inc scored a symbolic legal victory in efforts to keep its lead spot in the tablet computer market when a German court upheld a ban barring Samsung's local unit from selling its Galaxy 10.1 tablets in Europe's biggest economy.

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