AIG bailout restores confidence in Kospi
Seoul stocks ended higher yesterday as investor sentiment got a boost from a U.S. plan to bail out troubled insurer American International Group, analysts said.The benchmark Kospi advanced 37.51 points, or 2.7 percent, to 1,425.26. Volume was moderate at 390 million shares worth 5.7 trillion won ($5 billion), with gainers outpacing losers, 715 to 132.
“Investors were emboldened by the Fed’s intervention to bail out AIG,” said Kwak Jung-bo, an analyst at Hana Daetoo Securities.
Most large-cap shares traded sharply higher with home appliance giant LG Electronics rising 5.8 percent and LG Display adding 5 percent.
Market leader Samsung Electronics, however, remained flat at 525,000 won after SanDisk rejected a publicly announced bidding price from Samsung to acquire the U.S. flash memory maker.
Securities issues gained substantially following losses on Tuesday. Mirae Asset and Securities jumped 8.1 percent, while Samsung Securities advanced 6.5 percent.
Shipyards and shipping lines also benefited from restored investor confidence. Hyundai Heavy Industries, the world’s top shipbuilder, soared 10.4 percent. Daewoo Shipbuilding and Marine Engineering, the world’s third-largest, gained 6.9 percent.
“The AIG bailout announcement somewhat calmed investors’ excessive concern over global economic slowdown, which could lead to a drop in new vessel demand,” said Cho In-karp, an analyst at Goodmorning Shinhan Securities.
“The global financial turmoil is maximizing fluctuations in shipbuilding stocks,” he added. “Still, some investors think the stocks are really cheap now.”
STX Pan Ocean, Korea’s No. 1 bulk shipping line, gained 6.6 percent. Korea Line, the second largest, surged 8.5 percent.
Builders were also strong. Daewoo Engineering and Construction, Korea’s largest builder, gained 7.3 percent. Hyundai Engineering and Construction, the nation’s third-largest, rose 3 percent.
Concern about macroeconomic conditions are “reflected enough” in current stock prices, while the potential increase in government investment and more overseas orders cast a positive light on the industry, Tong Yang Securities said in a note.
Yonhap, Bloomberg
with the Korea JoongAng Daily
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