Will KOSPI Settle at a Four-Digit Number This Time?

The Korea Composite Stock Price Index (KOSPI) recovered to end at higher than 1,000 points for the first time in three months.

On June 15, KOSPI ended at a four-digit figure of 1,001.94 points, up 18.19 points (1.85 percent) from the previous day.

The KOSDAQ index closed at 486.46 points, up 6.99 points (1.46 percent) from the previous day.

The stock indices, having ended a two-day adjustment period, surged due to heavy buying by institutional investors.

On the Korea Stock Exchange Market, institutional investors purchased a net of 153.3 billion won, with investment trust management companies and pension funds buying 95 billion won and 42 billion won, respectively.

On the other hand, individuals and foreigners purchased a net of 168.3 billion won and 86.7 billion won, respectively.

Shares in the securities firms rose an astonishing 11.01 percent due to an expectation of booming stock markets. Shares in Samsung Electronics, following its stock repurchase, made big gains near the end of trading and ended at 500,000 won.

Among big shares, shares in Korea Electric Power Corp. gained 5.43 percent to record 33,000 won, its one-year high. Mobile phone companies such as SK Telecom (up 3.27 percent) and KTF (up 5.71 percent) also showed strong performances.

Yoon Se-wook, research head of Meritz Securities said, “The stock index received a boost as bad news such as North Korea’s nuclear issue and China’s yuan appreciation temporarily subsided. However, it will be difficult for the index to rise beyond 1,025 points or March’s peak, as the domestic economy will not recover very soon.”

Wan-Bae Lee roryrery@donga.com