Kospi creeps up 2% with government aid
After volatile trading, Korean stocks jumped over 2 percent yesterday as Asian market gains offset investors’ doubts over the effectiveness of the government’s financial stabilization package, analysts said.The benchmark Korea Composite Stock Price Index climbed 26.96 points, or 2.3 percent, to 1,207.63. Volume was moderate at 368.1 million shares worth 5.6 trillion won ($4.3 billion), with gainers outpacing losers 405 to 402.
Bank shares traded in positive territory on the back of the government’s package. No. 2 financial services company Shinhan Financial Group jumped 5.3 percent to 35,500 won and KB Financial Group, the holding company of Kookmin Bank, rose 2.8 percent to 39,050 won.
Hana Financial Group Inc., which controls Korea’s fourth-largest bank, surged 8.4 percent after the government guaranteed $100 billion of lenders’ foreign-currency debt. Fubon Financial Holding Co. added 6.7 percent after agreeing to buy ING Groep NV’s life insurance unit in Taiwan.
But shares of the state-invested Industrial Bank of Korea tumbled 6.2 percent to 7,980 won on concerns that the government’s plan to inject 1 trillion won into the lender may dilute share value. The government said it will inject capital into IBK as part of a bid to increase the bank’s lending capacity by 12 trillion won for cash-strapped smaller companies.
Exporters gained ground. Market leader Samsung Electronics rose 3.2 percent to 521,000 won.
Hyundai Motor Co., Korea’s biggest carmaker, jumped the most in seven years on speculation a weaker won will spur earnings. Hyundai soared 12 percent to close at 60,500 won. Kia Motors Corp., Hyundai’s affiliate and the nation’s second-biggest carmaker, rose 7.4 percent, the most in a month, to 10,950 won.
Hyundai Steel, Korea’s second-largest steelmaker, gained 2,250 won, or 6 percent, to close at 39,750 won. Its CEO Park Seung-ha said in the day the company expects full-year sales to rise by 62 percent to 12 trillion won compared with last year.
The local currency closed at 1,315 won to the dollar, up 19 won from Friday’s close, as investor sentiment was lifted by the government’s package to ease a liquidity crunch and stabilize the financial sector, dealers said. Yonhap,Bloomberg
with the Korea JoongAng Daily
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