Kospi punches through 2,500 for first time since 2018

Finance

Published: 16 Nov. 2020, 19:12 Updated: 16 Nov. 2020, 20:06

Kospi punches through 2,500 for first time since 2018

Kospi closed at 2,543.03 on Monday, surpassing the 2,500 threshold for the first time in nearly two and a half years. [YONHAP]

Korea’s Kospi index surpassed 2,500 Monday for the first time in nearly two and a half years on hope of economic recovery tied to a recent breakthrough in vaccine development.

The last time the index closed over 2,500 was in May 2018, when it ended at 2,505.61.

The Kospi closed at 2,543.03 Monday, up 1.97 percent from the previous trading day.

It opened strong at 2,507.46, a 0.54 percent gain from the last trading day, and hovered between 2,540 and 2,550 throughout the day.

Foreign investors net purchased 464.4 billion won ($419.4 million), the eighth consecutive session of foreign spree buying since Nov. 5. Institutional investors shed a net 162.3 billion won and retail investors net sold 275.1 billion won.

Foreign investors’ purchases were largely concentrated on Korean chipmakers as the industry is expecting a boom next year.

Samsung Electronics closed at 66,300 won, its all-time high closing price, gaining 4.91 percent from the previous trading day. Foreign investors net purchased 375.9 billion won worth of the IT behemoth’s shares.

SK hynix was up by 9.25 percent on Monday, closing at 98,000 won per share. Foreigners scooped up a net 315.5 billion won of its shares.

"Foreign investors have net purchased approximately 3 trillion won in the past month, but on a yearly basis they still net sold 23 trillion won," said Seo Jung-hun, an analyst from Samsung Securities. "Just recovering that amount of foreign capital in the Korean market will guarantee sizable liquidity."

Seo added that a weak dollar against the Korean won was tied to the U.S. election victory of Joe Biden, who is apparently going for an easy-money policy that will attract more foreign investors seeking foreign-exchange profits.

The local currency closed at 1,109.3 won against the greenback, 6.3 won up from the previous trading day. It is the first time in 23 months for the rate to close under 1,110 won level.

Local analysts anticipate a further rally in the market throughout the year.

"On the back of foreign investors' buying spree, the Kospi could reach its all-time high within this year," said Choi Yoo-june, an analyst from Shinhan Investment.

The all-time high record is 2,598.19, which was hit during trading on Jan. 29, 2018.

Brokerage houses are expecting the index to surpass the 2,700-mark next year. Samsung Securities estimated the index between 2,100 and 2,850 while Meritz Securities set out a range between 2,250 and 2,800. Hana Investment estimated the figure to reach 2,750 at the highest.

The secondary Kosdaq gained 0.98 percent, finishing at 847.33 on Monday.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]