Samsung surges as rivals sag

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

The stock rose 1.4 per cent to 1,437,000 won, its biggest five-day advance since August 1st, according to Bloomberg.

The shares have risen 36 percent this year, valuing the South Korea-based firm at 212 trillion won (€150 billion), making it the 15th-biggest in the world by market capitalisation.

Sony and Panasonic, reeling from record losses, will struggle amid a strong yen and weakened economic conditions in Japan and overseas, said Fitch in downgrading the companies to junk for the first time.

Unlike Samsung, which is expanding with record spending and profits, Japanese electronics makers are retrenching 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 and Securities, wrote. “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, said Fitch. Panasonic’s was lowered two levels to BB, also with a negative outlook, said the ratings firm. Both had their short-term ratings reduced to B from F3.

Samsung is rated A+ at Fitch with a stable outlook. Sony had 7 per cent of the global TV market in the quarter to September 30th, down from 8.4 per cent the previous quarter, according to DisplaySearch. Panasonic dropped to 6.2 per cent from 6.8 per cent in the same period.

Samsung remained number one with 25.2 per cent, according to the researcher’s website.

Separately, a US judge has ordered Apple to tell Samsung about the financial terms of a licensing agreement with HTC. – (Bloomberg)