Kospi continues to climb, closing above 1,500
Local experts said that after Korea reached a free trade agreement with the United States last week, foreign investors began a buying spree on the belief that the deal will stoke growth in Korean exports, spur economic expansion and help raise Korea’s credit rating.
Park Jong-hyun, head of the research center at Woori Investment and Securities, said the 1,500 barrier is also a psychological boost for the benchmark index.
It took less than six months for the Kospi to rise from 1,100 to 1,400, but 15 months to break 1,500.
Chung Eui-seok of Goodmorning Shinhan Securities said staying above 1,500 is more important than simply surpassing it once.
“It’s impressive how mid-sized companies have been the main driving force behind the rise to 1,500 points,” he said, “but at the end of the day, it comes down to how the big boys, like Samsung Electronics and Hyundai Motor, perform. Their earnings will be a critical determinant on whether the Kospi can maintain its upward swing.”
Daehan Investment and Securities’ chief researcher Kim Young-ik said it is “premature” to discuss whether the Kospi can stay in the 1,500s, because second-quarter corporate earnings could result in an extended correction later in the year.
On Dec. 13, 1997, in the midst of a foreign reserve crisis in Korea, the Kospi hit the all-time low of 338.94.
By Yoo Jee-ho Staff Writer [firstname.lastname@example.org]