Published : Sept. 11, 2013 - 20:56
The Korea Composite Stock Price Index exceeded the 2,000 mark on Wednesday, marking the first time since May 30, bouyed by foreigners’ continuous net buying.
The benchmark KOSPI closed at 2,003.85 on the Korea Exchange, up 9.79 points or 0.49 percent from the previous session.
Foreigners net purchased the local equities worth 676.6 billion won ($616 million), maintaining their net buying spree for the 14th consecutive trading session since Aug. 23. Samsung Electronics rose 0.43 percent to surpass 1.4 million won per share.
Korea Exchange Bank officials monitor the stock index that broke the 2,000 mark on Wednesday. (Yonhap News)
The tech-heavy KOSDAQ also gained 6.19 points or 1.18 percent to close at 529.34.
In addition, the Korean currency remained strong against the U.S. dollar on the day, though the greenback inched up 2.4 won to close at 1,086.5 won.
The won’s recent appreciation against major currencies is again yielding a variety of worries from some policymakers and business leaders over the economy, including possible weakness in the nation’s export prices competitiveness.
However, Korea’s biggest exporters in sectors including automobiles and information technology saw their company stock prices continue to rise over the past few months.
While some emerging countries were hit by the U.S. government’s move to scale back its stimulus policy, foreign investors purchased more stocks on the Korea Exchange.
Foreign investors active buying of Korean stocks has led the won to appreciate against the dollar, the yen and other major currencies.
“The present trend, paradoxically or dismissing the concern, shows that IT and automobile stocks are leading the bullish bourse,” said a Hanwha Securities analyst.
As more global investors acknowledge solid fundamentals of the Korean economy, it is hard to say that the hackneyed “formula that the strong won and cheap yen undermine Korea’s exports” is always correct, he stressed.
The U.S. dollar fell below the 1,100 won mark in early September after it was traded above 1,100 won for the past four months.
Over the past month, share prices of Samsung Electronics climbed more than 9 percent, faster than the 2.6 percent gain of the benchmark KOSPI.
Hyundai Motor and Kia Motors gained 7.7 percent and 8.4 percent, respectively, on the Korea Exchange over the corresponding period.
The Korea Development Institute, in its monthly report, said “a mild recovery in the U.S. and European economies is favorably affecting Korea’s export-oriented stocks.”
An executive of a local investment advisory firm said that exporters’ global competitiveness lies not in price competitiveness, but in the premium quality of their products.
By Kim Yon-se (kys@heraldcorp.com)