Foreign brokers say stocks volatile

Foreign securities firms forecast that the Korean stock market might fluctuate for the time being.

They pointed out in their recent market reports that the Seoul bourse would remain volatile, although it is still an attractive market.

In its report, "How to Cope with the Volatile Market,¡± UBS Warburg recommended an increase in investment if the Korea Stock Price Index falls below 700 points and a reduction in stock holdings if the index exceeds 900 points. It predicted that the index would fluctuate between 667 points and 899 points by the year`s end.

It explained that the potential for volatility is due to uncertainties of restructuring and good news that corporate profitability will improve and abundant liquidity.

UBS Warburg, however, noted that the Korean market would be very attractive in the long term if restructuring of investment-trust companies and financial institutions is successful, along with a possible soft landing of the U.S. economy. It recommended a strong buy of Samsung Electronics and Korea Telecom Freetel and recommended selling of Telson Electronics shares.