UPDATE 1-Samsung Electronics' shares jump after tentative wage deal suspends strike

Samsung ​Electronics' shares rose as much ​as 6.5% in morning ‌trade ​on Thursday after the tech giant and its South Korean union reached a tentative pay deal, ‌potentially averting a strike that had threatened to hit the economy and undermine global chip supply chains.

The union said the planned 18-day strike ‌by nearly 48,000 members would be suspended while the tentative 11th-hour ‌deal is put to a vote between May 22 and 27. The benchmark KOSPI was up 5.3% as of 0030 GMT.

Ryu Young-ho, a senior analyst at ⁠NH ​Investment & Securities, said investors ⁠were relieved that uncertainty surrounding the prospect of a strike had eased. Still, Ryu ⁠said the agreement was not entirely positive for investors as Samsung would ​likely need to set aside provisions tied to higher labour costs, ⁠which could weigh on operating profit.

The company's proposal of paying performance bonuses in company stock ⁠rather ​than cash appeared to reflect Samsung management's preference, as stock-based compensation could lower the immediate financial burden on the company, ⁠said Ryu. The two sides had been at odds over how performance ⁠bonuses would be ⁠distributed between the conglomerate's hugely profitable memory business and loss-making logic chip businesses, Reuters has previously reported.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)