Stocks due for a rebound
Due in part to the economic stimulus package announced yesterday, Korea’s benchmark stock index rose for the third consecutive day yesterday. The Kospi finished up 1.4 percent from Friday’s close.Local analysts, with a tendency toward optimism, agreed the Kospi could continue its upward trend this month as it makes up for October’s steep plunge.
The Kospi retreated by 23.1 percent from 1,448.06 at the end of September to 1,113.06 points on Oct. 31. It has risen 16.5 percent in the last three trading days.
“The measures announced today, although they are not technically new, complete a comprehensive economic stimulus plan,” said Rhoo Yong-seok, an analyst at Hyundai Securities.
The government said it will spend an additional 14 trillion won ($11.1 billion) by next year. It also said the ailing real estate industry, which some fear could spark another credit crisis, will get a boost from lifting some development bans.
“Regardless of the measures’ effectiveness, eased concern over the liquidity problem will boost the market a bit in November,” Rhoo said. “The expectation for new, strong leadership after the U.S. presidential election is also backing it.”
Rhoo said the index could rise above 1,200 points this month.
Hwang Geum-dan, an economist at Samsung Securities, also expected a mild rally this month.
“November will see less fluctuation than October as the financial crisis is being settled,” she said.
A full-fledged recovery, however, won’t be coming soon, Hwang said. The recovery of the real economy will take substantial time, she said. She expected the index to move in the 1,180-1,240 range. Lee Seung-woo, an analyst with Daewoo Securities, said the Kospi could rise to 1,250.
By Moon Gwang-lip Staff Reporter [joe@joongang.co.kr]
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)