Samsung Electronics starts trading under 50:1 stock split

Following three days of no trading,... Samsung Electronics has returned to South Korea's main bourse, the benchmark KOSPI.
This after the tech giant's decision in January to do a stock split.
The company's shares jumped in early trading.
Our Cha Sang-mi is at the Korea Exchange, where the market opened just half an hour ago.
Sang-mi, it's a big day on the financial market.

Indeed,.. Mark it is,... it's day one of Samsung Electronics being back on the market after the company spilt its stock 50-to-one. We're still just around one hour into trading,... but there's a bunch of attention on the KOSPI today with this split happening. Analysts and investors alike are very curious, maybe even nervous to see the affect it will have.

PK START




The massive change comes after Korea's tech giant announced a 50:1 stock split in January, saying the decision would make investing in the company "more accessible and provide dividends to a wider range of investors."

Analysts say the stock split doesn't change the valuation of the shares, but it will draw more individual investors because psychologically the stock looks cheaper.
Yet there are different viewpoints on the impact that comes with it:
Some analysts say Samsung's move will drive the stock price to rerate the Korean stock market given the fact that local investors will be much easier to access Samsung shares, which take up over 30 percent of Korea's stock exchange.

"One share is almost 2,500 dollars, which is the average monthly salary for a retail investor. So it's very difficult to approach this stock. So, the split will encourage a lot more people to invest in Samsung."

Yet some economists say, while it's almost no-brainer that for the next few days Samsung stock prices will shoot up, the impact is rather worrisome for the nation's stock market in the long run.

"As the Samsung prices goes up and take a bigger share of the Korean stock market that means 30 to 40 percent of Korean stock market will be controlled by just one firm. So whenever Samsung has a bad turn, it will make the entire Korean stock market unattractive."

The economist warned Samsung Electronics' strategy could possibly distort the market and allow one firm to wield too much influence over the entire market.


Mark, it's only been half an hour since the market opened. The mood here seems upbeat at least for now. I will get back to you with the latest update after the market closes later today. Back to you Mark.