Bullish Stock Market

The Korea Composite Stock Price Index (KOSPI) hit its highest mark in 10 years and 10 months.

On September 7, KOSPI closed at 1,142.99 after a sharp rise of 20.34 point (1.81 percent), surpassing the previous record of 1,138.75 set on November 8, 1994.

KOSPI was bullish all day after reaching the record high in the morning largely due to positive factors such as stabilizing oil prices and the expectation that the Federal Reserve Bank may freeze interest rates at the Federal Open Market Committee on September 20.

Institutional investors and foreign investors bought 148.2 billion won and 45.7 billion won of stocks respectively. Individual investors sold 212.4 billion won of stocks.

Most large market capitalization shares, including Hyundai Motors which surged by 6.90 percent, climbed.

Five hundred thirty-four stocks, including eight which hit the upper price limit, advanced. The number is much higher than that of stocks of which price dropped (201).

A bullish market is expected to continue for the time being as expectation for recovery is high due to the abundant capital mostly centered on the Accumulative Fund.

According to Zeroin, a firm specializing in fund analysis, stock funds have been on the rise for 13 consecutive months with a volume of 1.3 trillion won.

The number of fund accounts recorded 7,090,000 as of late July which means a family out of two owns an account. Accumulative funds also surpassed three million as of late July.

Wan-Bae Lee roryrery@donga.com