December 04, 2020 09:35
Samsung Electronics shares soared to a record W70,500 during the day's trading on Thursday but closed up 0.29 percent from the previous day at W69,700 as investors took profits (US$1=W1,094).
SK Hynix shares also rose to a record W114,500 at one point during the day.
The Korea Composite Stock Price Index also closed at a fresh record high of 2,696.22 points on Thursday. Individual investors are flocking to the stock market, drawn by the stellar performances of blue-chip shares. On Friday morning, it jumped above 2,700 points as soon as the market opened.
According to the Korea Exchange, individual investors snapped up W7.64 trillion worth of Samsung and SK Hynix stocks so far this year, accounting for 18 percent of total KOSPI net buying.
Pyun Deuk-hyun, vice president of asset management strategy at NH Investment and Securities, said, "The fact that Samsung Electronics and SK Hynix, which together account for 27 percent of total KOSPI market cap, both reached record highs is a good signal that gives us a hint of market conditions next year."
The junior Kosdaq, where trading by individual investors accounted for more than 88 percent of total volume, surpassed the 900-point-level on Thursday to close at 907.61 points, the highest so far this year. The last time the Kosdaq surpassed 900 points was on April 17, 2018.
The Korean won soared W3.8 against the U.S. dollar to a two-and-a-half-year high of W1,097 as the greenback floundered.
When the coronavirus epidemic exploded in the spring, investors dumped won and hoarded dollars, prompting the Korean government to sign a currency-swap deal with the U.S. to secure a lifeline in case of an emergency. But now there is an oversupply of dollars after the U.S. government unloaded more than $3 trillion into circulation. Foreign investors have been dumping the safe-haven American currency and hunting bargains in emerging-market stocks to satisfy a voracious new appetite for riskier assets, emboldened by the election of Joe Biden as the next U.S. president and rising hopes of a coronavirus vaccine.
The won fell to W1,285.7 against the dollar in mid-March but soared to under W1,100 on Thursday, up more than 17 percent.
Korea's foreign-currency reserves swelled to $9.87 billion last month, the highest level in about a decade, and some of that is estimated to be due to forex authorities here buying up dollars to stem the won's slide. Analysts predict the won could strengthen to W1,050 against the dollar by the end of this year.
Korea's export and current account indices have been strong recently, but that was due to semiconductors and some other key exports, while exporters of other products languish in the doldrums as the strong won makes their goods more expensive abroad.
Major investment bank project the dollar to weaken an additional five to 20 percent next year.
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