Samsung, SK Hynix Hit Historic Highs On Stock Market Amid Renewed Optimism
Korean tech giant Samsung witnessed a minor scare earlier this month when a power outage at its semiconductor facility in Hwaesong, South Korea forced production to halt for one hour. The breakdown came at a time when DRAM demand is expected to increase and outstrip output with original equipment manufacturers looking to build up inventory levels despite an expected thaw in the ongoing trade war between the United States and China.
Now, with an improvement in relations between the word's premier trading nations looking to be on the cards, and the South Korean stock market closing on new highs, shares of both Samsung Electronics and SK Hynix touched new highs during the day's trading on the Korea Stock Exchange, in a breath of fresh air for the sector that has seen difficult times lately.
Samsung, SK Hynix Jump To New Highs On Open Market Amidst Trade War Optimism & Improved Outlook For Semiconductor Industry
In its earnings guidance for the fourth quarter of 2019, Samsung Electronics had worrying news for investors and employees alike last week. The company stated that it expected operating profit for the quarter to stand in at 7.1 trillion Korean Won ($6.02 billion), down by 34% from its year-ago profit of 10.80 trillion Won.
The day Samsung posted this guidance, the company's shares dipped to a closing price of 56,800 Korean Won. Since then the company's stock has rebounded and during today's trading, Samsung's shares hit a new one-year record high price of 61,000 Won.
Shares of DRAM manufacturer SK Hynix mirrored those of Samsung Electronics during the day's trading on Monday. SK-Hynix jumped to a share price of 102,000 Korean Won on Tuesday's opening after having closed at 100,000 Won on Monday. This marked an impressive gain for a stock that had dipped down to 98,000 Won soo after trading commenced on Monday, but it failed to hit a one-year high price of 103,500 Won during either Monday or Tuesday's trading, but it did touch 103,000 Won multiple times during the day.
The reasons behind this fresh surge of optimism surrounding the two companies on the Korean market are stated to be expectations of improved earnings performance down the road facilitated by an increase in prices. The Korea Composite Stock Price Index gained 9.62 points during the day's trading with 823 million shares worth 7.1 trillion Won having traded hands during the day. As opposed to Samsung, SK Hynix is believed to post earnings similar to its year-ago quarter later this month.