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Samsung Reaches Record After Sony, Panasonic Cut: Seoul Mover

November 23, 2012

Samsung Reaches Record After Sony, Panasonic Cut

Samsung is rated A+ at Fitch with a stable outlook. Photographer: Dario Pignatelli/Bloomberg

Samsung Electronics Co. (005930) rose to a record in Seoul trading a day after Fitch Ratings cut Sony Corp. (6758) and Panasonic Corp. (6752) to junk, improving the chances of the world’s biggest maker of TVs to extend its dominance.

The stock rose 1.4 percent to 1,437,000 won, its biggest five-day advance since Aug. 1, according to data compiled by Bloomberg. The shares have risen 36 percent this year, valuing the Suwon, South Korea-based company at 212 trillion won ($195 billion), making it the 15th-biggest in the world by market capitalization, according to data compiled by Bloomberg.

Sony and Panasonic, reeling from record losses, will struggle amid a strong yen and weakened economic conditions in Japan and overseas, Fitch said yesterday in downgrading the companies to junk for the first time. Unlike Samsung, which is expanding with record spending and profits, Japanese electronics makers are shuttering factories and firing workers after struggling much of the past two decades without hit products to take on Apple Inc. (AAPL:US), Samsung and LG Electronics Inc. (066570)

“Samsung will benefit from the crumbling of its Japanese rivals,” Kim Hyung Sik, a Seoul-based analyst at Taurus Investment & Securities Co., wrote in a report today. “On top of smartphone sales, Samsung is also boosting its market share with tablet computers.”

Sony’s rating was cut by three levels to BB-, three steps below investment grade, with a negative outlook, Fitch said. Panasonic’s was lowered two levels to BB, also with a negative outlook, the ratings company said in a separate statement. Both companies had their short-term ratings reduced to B from F3.

Stable Outlook

Samsung is rated A+ at Fitch with a stable outlook.

Sony had 7 percent of the global TV market in the quarter ended Sept. 30, down from 8.4 percent the previous quarter, according to DisplaySearch. Panasonic dropped to 6.2 percent from 6.8 percent in the same period. Samsung remained No. 1 with 25.2 percent, according to the researcher’s website.

Separately, a U.S. judge in San Jose, California, yesterday ordered Apple to tell Samsung about the financial terms of a licensing agreement with HTC Corp. (2498)

That order came after Apple won a $1.05 billion patent- infringement verdict in a jury trial against Samsung as the world’s two-biggest smartphone makers battle in courts across four continents regarding technology in their mobile phones.

U.S. Magistrate Judge Paul Grewal ordered Cupertino, California-based Apple to produce a copy of the agreement with HTC under an “attorneys-eyes-only” designation, meaning it won’t be publicly available.

HTC, which is based in Taoyuan, Taiwan, isn’t entitled to special treatment, especially since it has recognized the general sufficiency of the protective order and the integrity of Samsung’s outside counsel, Grewal wrote.

To contact the reporter on this story: Saeromi Shin in Seoul at sshin15@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net; Darren Boey at dboey@bloomberg.net


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