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South Korean share prices are expected to make further ground in this week with sentiment boosted by hopes for a pick-up in the economy, dealers said. Higher oil prices could limit market gains but the demand base is strong because mutual funds and institutional investors such as pension funds are ready to put money into the market, they said. For the week to February 25, the composite index gained 12.85 points or 1.3 percent to 996.95.

The market managed to breach the key 1,000 points level briefly Friday, reflecting the underlying more positive tone, and the likelihood is that it should get over that hurdle soon.

Average daily volume was 564 million shares worth 3.5 trillion won (3.48 billion dollars), compared to 404 million shares worth 3.36 trillion won the previous week.

As the economy gears up for a recovery in the second half, boosted by a pick-up in domestic demand and solid export growth, the market is expected to enjoy further strength, dealers said.

Exporters should rise with investors less concerned about the strengthening of the won against the US dollar, they said.

"I have no doubt that it's a re-rating, with investors now appreciating the fair value of stocks. The four-digit level will likely be sustained for a long while this time," CJ Investment Securities analyst Kim Seung-Han said.

Other analysts predict a run-up to 1,200 points this year saying many stocks are still undervalued.

Hyundai Securities analyst Oh Sung-Jin said 1,000 points level holds a great symbolic meaning to the long-discounted market, being a level not seen for years.

Copyright Agence France-Presse, 2005


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