KOSPI Continues Record-Breaking Run
The Korea Composite Stock Price Index soared past 2,400 points level for the first time ever on Thursday. The KOSPI closed up 0.74 percent at 2,409.49 points powered by comments from U.S. Fed Chairwoman Janet Yellen that she supports continuing to raise benchmark interest rates "gradually."
Lee Byung-yeol at Samsung Securities said, "Unlike Yellen's previous comments, her latest ones were closer to the doves who support monetary easing and ended up bolstering stock investment sentiment."
The KOSPI rose to 2,420 points at one point in intra-day trading.
The bull run has been mostly powered by foreign investors, who have been buying up Korean stocks for two years even as institutional and individual investors sold them off.
According to the Korea Exchange, the total market cap of KOSPI and junior Kosdaq stocks held by foreign investors stood at W602.6 trillion as of Tuesday, surpassing W600 trillion for the first time (US$1=W1,137). Also, the proportion of total market cap of stocks held by foreigners rose to 34.04 percent.
The last time the proportion reached that level was in June 2007.
Some doubt there any momentum left. Excluding IT or financial stocks, listed companies have posted dismal earnings as the travel, hotel, duty-free and casino industries have been impacted heavily by a Chinese boycott, while scheduled renegotiations of the Korea-U.S. free trade agreement could deal a further blow to Korean shares.
Lee Chae-won at Korea Investment Value Asset Management said, "The KOSPI has risen this far powered by expectations, but actual spending and other economic indicators need to improve to achieve additional rises."