The Korean stock market is likely to be relieved by the impeachment of President Park Geun-hye, as the outcome was widely expected and already priced into the market.
On the day of the vote, the Kospi index remained stable, only falling slightly by 0.31 percent. The index had been on the rise over the three days since the opposition parties proposed the impeachment bill on Tuesday.
“(The stable market) is because the vote today is different from the political impeachment of the late president Roh Moo-hyun,” said Yoon Young-kyo at LIG Investment & Securities.
“The Korean stock market is now at a crucial juncture on the expectation of the improved transparency of the government and companies,” Yoon added.
In 2004 when the late Roh Moo-hyun was impeached, the Kospi price dropped by 5.7 percent.
Industry watchers, earlier in the day, predicted that the bill would have less impact on the market if it was passed because the impeachment was widely anticipated.
“The market situation will not significantly change because that is what was expected,” said Lee Jong-woo, an analyst from IBK Investment & Securities.
Kim Yoo-kyeom, an analyst at LIG Investment & Securities, also said, “Since President Park is unable to run state affairs as usual, the passage of the bill will not intensify the market confusion.”
Shares of Samsung Electronics -- despite the firm being involved in the political scandal over bribery allegations -- have risen since October, when the tech giant unveiled its plans to boost the shareholder value by considering splitting the company in two and paying out more in dividends.
Its shares hit a new record high of 1.8 million won ($1,540), the highest figure in the Korean stock market.
“Samsung Electronics’ shares are expected to continue to rise because of the company’s move to shut the group’s future strategy office, review for a split into two and the uncertainty alleviated from the impeachment,” said Kim Yu-Kyum, an analyst at LIG Investment & Securities.
By Shin Ji-hye (shinjh@heraldcorp.com)
