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KOSPI Regains the 2,000 Level on Strong Foreign Buying

The benchmark Korean Composite Stock Price Index (KOSPI) recovered the 2,000 mark milestone again on strong foreign buying, prompting analysts to predict that the Korean market, left out of the recent global stock rally, is likely to see the end of decoupling.

Analysts at KDB Daewoo Securities said, “Some may be a bit confused about the highest level since the first trading day of 2013. However, from the global financial perspective, the global economy is expected to make a turnaround with the abundant global liquidity.”

The securities company selected industrial materials, finance and media as promising sectors for investment. IT was also analyzed to earn a market rate of return.

“The KOSPI rallied as foreign investors made a net buying of local stocks worth 560 billion won, signaling the end of decoupling,” said an analyst from Hyundai Securities.

The analyst cited Japan’s trade account deficit in January and Germany’s surprising economic expectations index in February that raised hopes for a recovery in the eurozone as favorable conditions for the Korean stock market.

An analyst from TONGYANG Securities also said, “The Korean stock market recovered from the recent slump and turned upward, prompted by political uncertainties resolved”

Last weekend, President-elect Park Geun-hye named Hyun Oh-seok, the chief of the state-run Korean Development Institute, as the deputy prime minister in charge of economic affairs for the incoming government, which raised hopes for an economic turnaround of Korea. Park also mentioned the necessity of stabilization of the exchange rate, which eased concerns over the strong Korean won.

The analyst also pointed out some favorable external conditions, “With the record-high trade deficit, Japan is expected to shift from the weak yen focus. Even eurozone in economic doldrums shows a sign of potential economic recovery.”

Source Text

Source: Yonhap News (Feb. 20, 2013)

** This is the translation of a Korean article.

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