Samsung reaches record after Sony, Panasonic cut

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.