KOSPI Surpasses 720

On July 14, the Korea Composite Stock Price Index (KOSPI) exceeded 720 points for the first time in seven months, and market capitalization also exceeded 300 trillion won.

This achievement was due to the share price of Samsung Electronics, the KOSPI market cap leader, soaring to 400,000 won over the past 15 months amid aggressive purchasing by foreign investors.

On the July 14, KOSPI closed at 720.10, up 15.95 points (2.27%) over Friday`s close. This brought the index above 720 for the first time since the December 5, 2002, when it marked 722.76. The Kosdaq closed at 53.12, 0.57 points (1.08%) up from last week.

Foreign investors` net stock purchases totaling 402.6 billion won were a leading cause behind the increase in share prices. Samsung Electronics closed at 409,500 won, its highest level in 15 months, following 413,000 won on April 25, 2002. Some analysts predict the company will surpass its current peak of 432,000 won, posted on April 24 last year, after reporting second-quarter results on July 16.

Semiconductor-related stocks were especially bullish during the day, including Hynix Semiconductor which reached its upper limit, Annam Semiconductor (up 9.0%), DI (up 3.15%), and Shinsung ENG (up 1.59%).

Meanwhile, the won-dollar exchange rate dropped 1.9 won to 1176.3 won, registering declines the past five consecutive days.

Chan-Sun Hong hcs@donga.com