Retail investors give Kospi needed boost
Korean shares managed to add 0.3 percent yesterday, as retail investors bet that a government stimulus plan will pick up the slowing economy.Bucking early losses, the benchmark Kospi climbed 3.37 points to close at 1,161.56. Volume was heavy at 618.36 million shares worth 6.71 trillion won ($4.96 billion), with gainers outpacing losers 511 to 351.
“A buying spree by retail investors helped slash early losses. They purchased local shares on hopes that large-scale construction projects will stimulate the sluggish economy,” said Yoo Seung-min, an analyst at Samsung Securities.
The Korean government unveiled a plan on Monday to spend 14 trillion won over the next four years to improve and redevelop four local rivers in an effort to buffer an economic slowdown. Wall Street tumbled Monday after a pyramid fraud weighed on financial shares. Former chairman of the Nasdaq Stock Market Bernard Madoff was arrested last Thursday for orchestrating an alleged $50 billion scheme to swindle investors, including leading banks the world over. The Dow Jones industrial average shed 0.8 percent and the tech-heavy Nasdaq composite index plunged 2.1 percent.
Automakers gave the index its biggest boost, with Hyundai Motor adding 5.6 percent. Its affiliate Kia Motors shot up 13.6 percent.
Financial shares also finished higher a day after Morgan Stanley raised their credit ratings. Woori Finance Holdings jumped 4.8 percent and KB Financial Group surged 3.5 percent. State-run Industrial Bank of Korea added 5.1 percent. Hana Finance Holdings jumped 6.2 percent after it announced plans to raise 300 billion won selling bonds and use the proceeds to boost capital at its Hana Bank unit.
The capital injection into the banking unit will be made this month, Seoul-based Hana Financial said in a regulatory filing yesterday. Retailers added to the overall gains. Shinsegae, a leading retailer, advanced 2.6 percent and Hyundai Department Store added 3.4 percent.
IT shares, however, ended sharply lower as the global economy is forecast to remain weak down the road. Market bellwether Samsung Electronics shed 3.2 percent to 457,000 won and its smaller rival LG Electronics fell 2.3 percent. Yonhap
with the Korea JoongAng Daily
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