Stock funds that invest in affiliates of Samsung Group are expected to continue to build up gains on hopes that South Korea's largest conglomerate will accelerate its moves toward a more simplified ownership structure through mergers and asset sales, thus inducing a leadership change to the group owner's heirs, analysts said Wednesday.

Cheil Industries Inc., Samsung's de facto holding company, and Samsung C&T Co., its trading and construction arm, on Tuesday announced their plans to merge in September, the latest in a series of mergers among the group's affiliates.

The move was widely seen as part of groupwide efforts to speed up a power shift from group owner Lee Kun-hee to his only son, Jay-yong, vice chairman of flagship unit Samsung Electronics Co., as senior Lee has been hospitalized since last May following a heart attack.

Fresh hopes for a major reshuffle drove up the two subsidiaries' shares by the daily price limit of 15 percent on the Seoul bourse Tuesday. Samsung SDS Co., a key IT unit listed in November, surged 7 percent following the announcement.

On Wednesday, Cheil Industries and Samsung C&T each surged 1.33 percent and 3.46 percent, outperforming the benchmark index KOSPI's 1.68 percent fall. The group's IT outsourcer, Samsung SDS, also jumped 6.17 percent.

Their rally also boosted hopes for stock funds with exposures to Samsung Group shares, such as Samsung Electronics and other key units.

Market watchers say there is further room for growth for Samsung Group shares, expecting the merged unit to play a critical role in a smooth transfer to the heir apparent.

"Samsung Group shares, including those of Samsung Electronics, are also expected to log improved earnings, and the merged unit will play a role as the group's de facto holding company," said Baek Jae-yeol, a fund manager at Korea Investment Management, which manages Samsung stock funds estimated at 3.4 trillion won in asset value. "Additional restructuring moves are expected to enhance the yields of Samsung stock funds."

Currently, Cheil Industries stands at the top of the group's ownership chart through a cobweb-like ownership structure. The group's key affiliates, which include Samsung Life Insurance Co., Samsung Electronics Co., Samsung SDI Co. and Samsung C&T, are intertwined through complex stock holdings.

Although Jay-yong only holds a 0.57 percent stake in Samsung Electronics, watchers speculate the latest merger proposal will help the heir apparent expand his control over the tech giant as well. (Yonhap)