Samsung Electronics

Samsung reaches record after Sony, Panasonic cut

PUBLISHED : Friday, 23 November, 2012, 4:28pm
UPDATED : Friday, 23 November, 2012, 8:49pm

Samsung Electronics rose to a record in Seoul trading a day after Fitch Ratings cut Sony Corporation and Panasonic Corporation to junk, improving the chances of the world’s biggest maker of televisions to extend its dominance.

The stock rose 1.4 per centto 1,437,000 won, its biggest five-day advance since August 1, according to data compiled by Bloomberg. The shares have risen 36 per centthis year, valuing the Suwon, South Korea-based company at 212 trillion won (US$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, Samsung and LG Electronics.

“Samsung will benefit from the crumbling of its Japanese rivals,” Kim Hyung Sik, a Seoul-based analyst at Taurus Investment & Securities, 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.

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

Sony had seven per centof the global TV market in the quarter ended September 30, down from 8.4 per centthe previous quarter, according to DisplaySearch. Panasonic dropped to 6.2 per centfrom 6.8 per centin the same period. Samsung remained No. 1 with 25.2 percent, according to the researcher’s website.

Separately, a US judge in San Jose, California, yesterday ordered Apple to tell Samsung about the financial terms of a licensing agreement with HTC Corporation.

That order came after Apple won a US$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.

US 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.