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Arrest warrant rejection likely to give Samsung stocks temporary boost: report

(Yonhap)
(Yonhap)

A court’s rejection of the prosecution’s request to arrest Samsung Electronics Vice Chairman Lee Jae-yong on Tuesday, appears to have temporarily cleared uncertainties surrounding the chip giant’s operations, a local brokerage said in a report.

The de facto heir to the Samsung empire was released early morning after the Seoul Central District Court’s decision to try Lee without arresting him, citing insufficient probable cause.

“As Lee avoided arrest, he is expected to provide institutional strategies to reform corporate governance structure and strengthen management transparency, and focus on improving the company’s value,” said Kim Dong-won, an analyst at KB Securities.

He also forecast that Lee will push for active mergers and acquisitions as Samsung Electronics held about 97.5 trillion won ($81.4 billion) cash reserves as of the first quarter of this year.

The tech giant’s business outcome in the second half of this year is further anticipated to improve following better-than-expected demand for semiconductors, displays, electronic appliances and cellphones in the third quarter, according to Kim.

As Lee avoided the worst-case scenario of going behind bars again, Samsung Electronics’ shares traded up 1.09 percent higher to close at 55,500 won.

Meanwhile, the stock prices of the nation’s largest conglomerate’s financial firms had mixed fortunes during the trading session. While Samsung Fire & Marine Insurance gained 0.25 percent, shares of Samsung Card and Samsung Life Insurance shed 1.46 percent and 0.59 percent, respectively.

By Jie Ye-eun (yeeun@heraldcorp.com)
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