Few Bright Signs Seen in April Mart

Local brokerage firms contacted on Sunday were downbeat about the stock market outlook for April.

Few analysts said they expected that the Korea Composite Stock Price Index, which closed last week at 523.22, would rise to above the 600-point level in April, but several firms said they believed the index could fall to below 500 points during the month. Hyundai Securities forecast that the Kospi would move between 480 and 550 points. Dongwon Securities reckoned the range at between 470 and 580 points, and Samsung Securities estimated April's downward limit at a comparatively high 520 points, but said it saw the maximum level at 560 points. Daishin Securities, Good Morning Securities and LG Investment & Securities said they thought the Kospi would range from 500 to 600 points.

Tong Yang Securities, Good Morning and Hyundai were also somewhat gloomy about the outlook for the Kosdaq, saying they forecast the board's composite index, which ended last week at 68.43, would fall to the 60-point level at worst. Daewoo Securities, Hanwha Securities, SK Securities and Samsung were more optimistic, predicting a 65 to 80 point range.

Brokerage firms generally saw more bearish than bullish factors in deciding on their forecasts for April's local stock markets. As major adverse factors, Tong Yang and Dongwon cited deteriorating earnings by U.S. high-technology firms, and Hanwha and SK pointed out downward pressure on foreign stock markets, including Wall Street. Good Morning and SK said that the weakening Korean won value against the U.S. dollar would affect Seoul stocks.

A number of securities companies, including Daishin and LG, said they were worried about an insufficient flow of funds into the local stock markets. The slowing Korean economy was also pointed out as a major bearish factor by Good Morning, Hanwha and Hyundai.

Hanwha and LG said the recent bailout of Hyundai Engineering & Construction would be a favorable factor in April's markets, as uncertainties regarding Hyundai would be reduced. Daewoo, Samsung and Hanwha cited consumer sentiment rebound as a bullish factor.

Most brokerage firms said that the recent rebound of semiconductor prices and chipmakers' stock values on the global market was a good sign. Dongwon, Samsung and LG cautiously said that globally, semiconductors might have already seen the worst or might hit bottom very soon.

Samsung Electronics Co. has become the most recommended issue by brokerage firms. Daewoo, Tong Yang, Hyundai, LG and SK all issued "buy" recommendations.

"The market has reversed to the situation of the fourth quarter of last year," said Shin Jin-ho, a research fellow at Dongwon Economic Research Institute. "Since there is no strong factor to pull stocks up in April, investors should stay cautious."

by Chung Sun-gu