Stocks to receive boost on foreign buying

By Korea Herald
  • Published : Apr 6, 2014 - 20:34
  • Updated : Apr 6, 2014 - 20:34
Shares on the local bourse are expected to rally this week on steady buying from foreign investors, who are likely to stay positive thanks to solid economic data from home and abroad, according to analysts.

They now expect the Korean market to settle above the touted 2,000-point level, noting that the benchmark Korea Composite Stock Price Index surpassed the 2,000-point level at one point Wednesday for the first time in three months.

The KOSPI finished the week at 1,988.09 this week, up 0.64 percent from Monday.

Foreigners scooped up a net 1.3 trillion won ($1.23 billion) of shares during the week, while institutions sold a net 700 billion won, and retailers dumped 600 billion won.

A series of upbeat economic data releases in South Korea and the U.S. seemed to have been fueling the rally.

Korea’s March exports rose 5.2 percent on-year, while its February current account surplus widened. In the U.S., factory activity inched up to 53.7 in March from 53.2. China’s official purchasing managers’ index also rose to 50.3 in March.

A reading above 50 indicates a general expansion.

“Thanks to the steady manufacturing data and the mini-stimulus, uncertainties about the Chinese economy faded away to some extent,” said Jennifer Lee at KDB Daewoo Securities. “The inflow of foreign investment will continue and keep boosting the Korean stock market next week.”

More good news may come, as Samsung Electronics is set to report its first quarter earnings guidance Tuesday.

The company is expected to post a modest rise in operating profit from the previous quarter.

China is set to unveil its trade balance for March on Thursday, with the release of the U.S. Federal Open Market Committee minutes expected on the same day.

“If China’s exports stay below the market consensus, the Beijing government is expected to roll out a stronger stimulus plan to boost the slowing economy instead of the mini package,” said Lee.

By Bae Hyun-jung and news reports