(LEAD) Seoul shares edge up 0.28 pct on gains in Samsung shares

(ATTN: ADDS bond yields at bottom)

SEOUL, Oct. 31 (Yonhap) -- South Korean shares edged up 0.28 percent Friday as investors indulged in Samsung Electronics shares on growing expectations for dividend payouts, analysts said. The local currency fell sharply against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) added 5.5 points to 1,964.43. Trading volume was moderate at 342.8 million shares worth 5.29 trillion won (US$4.96 billion), with losers leading winners 466 to 338.

"Strong demand for shares of Samsung Electronics and its affiliates led the KOSPI to rise after the company said it will pay higher dividends," said Park So-yeon, a senior analyst from Korea Investment & Securities Co. "But the increase was limited because most shares were in negative territory due to a lack of momentum."

She said further quantitative easing by Japan would fuel appreciation of the South Korean won against the yen, which will dampen the profitability of local exporters like Hyundai Motor and Kia Motors.

"It looks like the market was divided into two -- Samsung shares and non-Samsung shares," said the analyst. "There is no big momentum to push up the index now."

Samsung Electronics, the country's largest company in market cap, jumped 5.33 percent to a two-month high of 1,244,000 won, extending its winning streak to three consecutive sessions.

Samsung SDI, its affiliate that makes rechargeable batteries, rose 4.13 percent to 126,000 won and shipbuilding unit Samsung Heavy Industries gained 1.56 percent to 26,050 won.

On the first day of the local release of the iPhone 6, mobile carriers finished mixed, with industry leader SK Telecom shedding 0.37 percent to 267,000 won and runner-up KT advancing 2.34 percent to 32,800 won.

Shipbuilders went south on gloomy third quarter earnings, with Hyundai Heavy Industries, the world's top shipyard, dropping 0.8 percent to 99,200 won and Hyundai Mipo Dockyard, a mid-sized container shipbuilding subsidiary of Hyundai Heavy, plunging 13.26 percent to 75,900 won.

Top carmaker Hyundai Motor slid 1.16 percent to 170,000 won and its affiliate, Kia Motors, lost 1.33 percent to 52,100 won.

The local currency closed at a three-week low of 1,068.5 won against the U.S. dollar, down 13 won from Thursday's close as the greenback was supported by upbeat U.S. data and a possible rate hike, coupled with Japan's announcement of monetary expansion.

Bond prices, which move inversely to yields, ended sharply higher. The yield on three-year Treasurys fell 5.8 basis points to 2.138 percent, and the return on the benchmark five-year government bonds slid 5.4 basis points to 2.291 percent.

brk@yna.co.kr
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