S. Korean shares to gain next week

Published : Jan 15, 2011 - 14:32 Updated : Jan 15, 2011 - 14:32

South Korea's stock market is expected to continue doing well next week although gains will be more modest as investors may take on a more wait-and-see approach, local analysts said Saturday.

The country's benchmark Korea Composite Stock Price Index (KOSPI) gained 18.69 points to close at a record high of 2,108.17 on Friday, a month after the bourse surged past the 2.000-point mark on Dec. 14.

The KOSPI index surpassed the 2,100 point mark for the first time ever in the trading session on Thursday, reflecting overall confidence in the market.

Experts said the gains were fueled by a large amount of liquidity that has been injected into the market by private investors. The gains were achieved despite profit taking by foreign investors who played a vital role in pushing up prices last year.

Private investors bought a net 1 trillion won (US$896.8 million) worth of stocks throughout the week. Prices for securities-related stocks, construction, shipbuilding, autos and electronics all did well.

"The market may be able to pull of modest gains in the new week, with investors recommended to hold onto their shares," said Lee Seung-woo, an analyst at Daewoo Securities Co.

Others also said that while lingering fiscal uncertainties in Europe and sharp rises in stock prices may raise the risk of adjustments, overall conditions are favorable for more gains.

Lee Joo-ho, an analyst at Woori Investment Securities Co., said there may be a need to pay more attention to such areas as automobiles, auto parts and shipbuilding shares.

He said, however, that share prices for manufacturers that make goods being targeted by the government for close monitoring to stem inflationary prices may go down.

Seoul said earlier in the week that it will closely check prices of everyday necessities such as food and fuel prices that have started to exert adverse effects on the government efforts to keep inflation below the 3 percent mark for the entire year.

(Yonhap News)