KOSPI Jumped 29 Points Topping 670

The benchmark Kospi jumped to 670 points, hitting a yearly high in 14 months. As a great amount of dollar was flowed in to buy our stocks, value of won was super-strong, and the interest rates rose up again.

The Kospi jumped 29.38 points (4.55 percent) to 674.56 yesterday, the highest in 14 months which marked 676.69 points. The Kosdaq also gained 1.66 points (2.35 percent), closing at 72.08, reaching above 72 in 4 months.

Foreigners played the leading role in the market yesterday, while individual investors played the supporting role.

Foreigners led the rise of Kospi through the mass net purchase both in futures and spots. Foreigners bought stocks amounting to 309.8 billion won, 286.5 billion won from the stock exchange market and 23.3 billion won from the Kosdaq, respectively. Both financial stocks and construction stocks, which were bought by foreigners, marked the upper limit. Individual investors backed up the rise of Kospi through the net purchase amounting to 49.4 billion won, and the institutions also made the net sale amounting to 310 billion won. Trading fee marked 4.5208 trillion won, the year`s highest amount.

Kim Ji-Young, team chief of the investment strategy at Samsung Securities, said, "While the market will go through a temporary adjustment in the middle of the week due to the excessive short-term boom, the share markets will continue to rally due to the economic recovery next year."

Meanwhile, exchange rate of won against dollar was 1262.10 won, down 9.7 won in the foreign exchange market. Although the Ministry of Finance and Economy intervened on the foreign exchange market once yesterday morning, it could not control the strength of won due to the foreigners` net purchase funds for stocks.

Interest rates of the treasury bond with 3-year expiration, which showed the declining tendency last weekend, closed at 5.89 percent, up 0.07 percent from the previous day due to the Ministry of Finance and Economy`s hint that it may issue additional foreign exchange stabilization bond.

Rae-Jeong Park witness@donga.com