[THE INVESTOR] South Korean stocks rose on Oct. 6 after Samsung Electronics received a nudge from US hedge fund Elliot Management. The Korean won strengthened against the US greenback.

The benchmark KOSPI added 12.3 points, or 0.6 percent, to close at 2,065.3. Trade volume was moderate at 332.83 million shares worth 5.23 trillion won (US$4.70 billion), with decliners outnumbering gainers 448 to 348.

Shares of Samsung Group affiliates rallied after Elliott Management urged the crown jewel of South Korea’s largest conglomerate to split into two. Elliot then recommended the tech giant list the operating company on the NASDAQ stock exchange and pay a special dividend, raising hopes that it could increase returns to shareholders. 

The New York-based activist fund last year opposed the merger of two Samsung affiliates, but it lost the lengthy, uphill battle.

Foreigners and retail investors bought a net 101.14 billion won and 46.94 billion won, respectively, while institutions sold a net 155.49 billion won.

Market kingpin Samsung Electronics increased 4.45 percent to 1,691,000 won after the company said that it will “carefully consider” Elliot’s proposal. Its share prices hit a record high of 1.7 million won in early trading after its announcement.

Samsung C&T, a construction arm that serves as the group’s de facto holding firm, jumped 7.89 percent to 164,000 won to become the nation’s fourth-largest company by market value.

Samsung Life Insurance, a life insurer of the conglomerate that plays a key role in the group’s cross-shareholding structure, rose 4.31 percent to 109,000 won.

The local currency closed at 1,112.2 won against the US dollar, up 1.5 won from the previous day.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 0.5 basis point to 1.321 percent and the return on the benchmark five-year government bond added 1.2 basis points to 1.341 percent.

(theinvestor@heraldcorp.com)