“Will the Composite Stock Price Index Hit 1,000 and KOSDAQ Index Hit 500?”

“Will the Korea Composite Stock Price Index reach the 1,000 mark and KOSDAQ index reach the 500 mark?”

On February 7, shortly before the lunar New Year holiday, the benchmark Korea Composite Stock Price Index approached 1,000 and the KOSDAQ Index approached 500 while stock prices were skyrocketing.

In particular, some say that the domestic stock market has entered an earnest uptrend phase, as stock prices are showing signs of rise amid uncertainties in foreign exchange and interest rates.

Domestic Stock Market Sets Plenty of Records-

The Korea Composite Stock Price Index closed at 949.19 on February 7, a 15.64-point (1.67 percent) increase from the previous trading date (February 4), thanks to the booming U.S. stock market and expectations for a recovery of domestic consumption.

The figure is the highest in five years since 953.22 on February 11, 2000.

Samsung Electronics, whose stock tops the list of aggregate value of listed stock, closed at 510,000 won, a 14,500 won (2.93 percent) up from the previous trading date and the highest level in eight months since end of the May of last year.

The KOSDAQ index also closed at 481.40, a 15.89-point (3.41 percent) rise from the previous trading date.

Accordingly, the aggregate value of listed stock as of February 7 reached about 480.79 trillion won (about 439.5 trillion won for the stock exchange market, around 41.29 trillion won for the KOSDAQ market), the highest figure ever.

An Earnest Uptrend?-

Most stock experts expect that an era of “a composite stock price index of 1,000 and a KOSDAQ index of 500” will soon begin, as the stock market is already heated and there is no major bad news that will affect stock prices in sight.

Shin Sung-ho, the head of the research center of Woori Securities said, “There will be some adjustments after the Lunar New Year Holiday, but chances are that the composite stock price index will hit 1,000 mark as early as the first quarter (January to March).”

Meanwhile, Citigroup, an American investment bank, said in its investment report released on February 7, “Although consumption expenditures are increasing, there won’t be a sharp rally which turns around sluggish business conditions,” predicting, “the composite stock price index could drop to 795 in three to six months from now.”

What Should Individual Investors Do?-

Stock experts say indirect investment to minimize risks, and investment in IT and financial stocks would be wise, as stock prices have increased considerably.

Lim Choon-soo, head of the Samsung Securities Research Center, says, “Fund managers who are experts in the stock market are better than individual investors in many aspects,” adding, “It’s good to register a fund if you are reluctant to make a direct investment.”

Jin-Hup Song jinhup@donga.com