FINANCE

Kospi’s record-high rally continues on COVID-19 vaccine, recovery hopes

Korean benchmark logs 2nd highest stock growth among G-20 bourses in 2020

  • Published : Nov 24, 2020 - 15:15
  • Updated : Nov 24, 2020 - 20:22
An electronic signboard at the Korea Exchange on Tuesday shows the Kospi closed at 2,617.76, setting its all-time high. (KRX)
South Korea’s main bourse extended record-setting rallies for the second consecutive session Tuesday, setting a fresh high on hopes of an economic recovery and new coronavirus vaccine developments.

The Kospi closed at 2,617.76, up 15.17 points, or 0.58 percent, from the previous session’s close, which itself was an all-time closing number. It even surpassed the intraday record of 2,607.10 marked on Jan. 29, 2018 in morning trading.

The index started off at 2,616.28 and gained throughout the day. At one point, it reached as high as 2,627.58 in the early morning on the back of offshore investors’ buying spree for the 14th consecutive session. Retail investors had turned to net buyers in early trading, but as they offloaded their shares in the market, the index erased some of the earlier gains.

Despite the country facing the growing threat of another wave of COVID-19 infections as new daily confirmed cases surpassed 300, investor sentiment was boosted by optimism on the progress on COVID-19 vaccines and a recovery of the virus-hit economy.

“While a hope for the vaccine development continues, news of US Presidential-elect Joe Biden being set to pick former US Federal Reserve Chair Janet Yellen as his Treasury secretary backed up the further rise in the index,” said Lee Kyung-min, an analyst at Daishin Securities.

While most large-cap stocks traded higher, market kingpin Samsung Electronics hit 67,700 won ($61), slightly up by 200 won or 0.3 percent, at the closing bell. The shares once rose by 2.96 percent to 69,500 won, breaking its all-time high from a day earlier. Buttressed by foreigners’ robust net purchasing, along with retail investors, its market capitalization soared to some 412.5 trillion won.

Shares of LG Chem and Samsung SDI also soared by 6.82 percent and 4.94 percent, respectively, to mark 52-week highs of 799,000 won and 552,000 won at the closing. With the gain, the chemical giant became the third most valuable firm on the Kospi market, pushing Samsung Biologics from the position as the pharmaceutical firm’s stock fell by 0.25 percent to 802,000 won.

The tech-heavy Kosdaq started off strong at 876.65, but began moving downward from early trading hours to close at 872.1, down 1.19 points, or 0.14 percent. Foreign investors turned to net buyers, but the momentum was weighed down by sell-offs by retail and institutional investors.

In line with the nation’s benchmark rallies, Kospi’s growth posted the second highest among bourses in G-20 nations this year, according to data from Korea Exchange. While the G-20 countries’ average stock growth came in at nearly 0.45 percent, Kospi jumped 16.2 percent from earlier this year to Friday. It was exceeded only by Argentina, with its bourse growing 23.6 percent during the period.

Recently, foreign investors hoisted the main bourse by snatching up 6.4 trillion won of local shares, but the overall surge was largely attributed to retail investors’ greater influence, KRX officials said. By recording a 10th consecutive month of buying, they snapped up shares worth 41 trillion won this year, the data showed.

“Amid a global economy entering a recovery phase, the local index was backed by a positive evaluation of its fundamentals based on local companies’ solid business performance. The relatively undervalued Kospi is now taking a leap forward,” a KRX official added.

By Jie Ye-eun (yeeun@heraldcorp.com)
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