Kosdaq nears record high

Home > Business > Economy

print dictionary print

Kosdaq nears record high

테스트

Korea’s small-cap Kosdaq keeps getting hotter, approaching a record high thanks to a boost in American tech stocks and the local popularity of small to mid-cap stocks.

According to the Korea Exchange on Wednesday, the Kosdaq rose 0.92 percent to close at 746.62 points, climbing for the seventh straight trading day.

Expectations among investors are rising that the Kosdaq will break its record high of 751.57 points, set in December 2007.

The Kosdaq has been at full steam this month, exceeding 720 points on June 9 and 730 points on Monday.

Compared to the beginning of the year, the market index has risen by 37.5 percent.

With the index climbing, Kosdaq’s market cap surpassed 200 trillion won ($180 billion) on Tuesday for the first time. The index reached 100 trillion won eight years ago.

The index kept climbing on Wednesday, reaching 200.9 trillion won.

This year, Kosdaq has also seen its average daily trading volume reach a record high at 3.52 trillion won, 78.7 percent higher than last year’s 1.97 trillion won.

Some analysts are debating whether the small-cap trend is sustainable, or the product of temporary investment strategies. The Kosdaq market mostly consists of individual investors, accounting for 87 percent of the total.

Most analysts say the Kosdaq will continue to expand, considering that the U.S. Nasdaq index also reached a record high, but some claim there is no further momentum to keep the market climbing.

One reason analysts are optimistic about the future of the Kosdaq is the Nasdaq index that, like the Kosdaq, mostly consists of technology-related shares. The Nasdaq closed at 5,153.97 points on Monday local time, beating the index’s record of 5,132 in March 2000 during the dot-com bubble.

“The Kosdaq started to rise in 1999 during the Internet bubble, about three years later than the Nasdaq did,” said Lee Eun-taek, an analyst at SK Securities. “The Nasdaq index has risen since 2012, and the Kosdaq has started this year due to the local economy’s slowdown. The uptrend of technology stocks will remain for the next two to three years.”

“Because American stock indexes as well as tech and bio stocks are expected to keep rising, the Kosdaq will show similar trends reflecting the global trend,” said Cho Yoon-nam, head of Daishin Securities’ Research Center.

But not all analysts are so optimistic about the index’s ability to keep climbing.

“The Kosdaq is showing a similar trend as in 2007, when it dropped after reaching its record’s high,” said Choi Dong-hwan, a researcher at Shinhan Investment & Securities.

He explained the index may fall after the Fed raises its interest rate.

Kang Hyun-chul, director of investment strategy at NH Investment & Securities, was negative about the future. He said about half of Kosdaq-listed companies are constantly seeing operating losses, and the recent climb came from future growth potential, not actual corporate fundamentals or strong performances.


BY KIM CHANG-GYU [kim.jiyoon@joongang.co.kr]

More in Economy

On the campaign trail

Online courses get failing grades from tech students

Help after the rains

Plush protest

The Gangnam-Gangbuk price gap remains

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now