Cash-rich bluechips like Samsung Electronics Co. and LG Electronics Inc. have been outperforming the benchmark Kospi index so far this year as foreign and institutional shareholders look to their cash reserves for affordability for enhanced benefits for shareholders.
According to data compiled by market tracker FnGuide and analyzed by the Maeil Business Newspaper on Sunday, Kospi-listed 18 conglomerates that own 1 trillion won ($888.9 million) or more in cash and cashable assets through gains in recent two years have seen their stocks gain 16.5 percent on average from the beginning of this year to Friday, faster than the 12.8 percent rise of the Kospi over the same period.
The biggest gainers were tech giants LG Electronics (57.4 percent) and Samsung Electronics (27.1 percent) and financial heavyweights such as Mirae Asset Daewoo Co. (27.6 percent) and Meritz Financial Group (26.1 percent).
Shares of LG Electronics hit a fresh 52-week high of 81,800 won during trading on Monday. LG Electronics’ cash and cashable assets have risen from 2.2 trillion won at end-2014 to 3.01 trillion won at end-2016, topping the 3 trillion won mark for the first time. LG Electronics shares ended Monday at 81,000 won, down 0.25 percent from the previous session.
Samsung Electronics’ cash and cash reserves surged a whopping 15.3 trillion won over the same period, driven by a rise in prices of semiconductors. Shares of Samsung Electronics inched up 0.61 percent on Monday to close at 2,305,000 won.
Investors expect the companies to dig into their cash hoard and pay generously to shareholders and re-invest to drive future growth.
By Moon Il-ho
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