By Kim Rahn
Korean stocks are expected to continue to rise and break the 2,000 mark in the coming weeks on the back of foreigners' buying spree, analysts said Friday.
Analysts are forecasting foreigners will keep buying Korean stocks for a while as the global economy is showing signs of picking up and investors are returning to emerging markets.
The benchmark KOSPI Friday inched down 5.61 points, or 0.28 percent, to 1,988.09.
The index surpassed the 2,000 mark at one point on Wednesday for the first time this year, and on Thursday as well. It has remained below that mark since the first day of the market opening on Jan. 2.
Foreigners led the buying ― they net bought Korean stocks for eight consecutive days, totaling 1.96 trillion won. Their purchase increased the KOSPI from around 1,940 to near 2,000.
Analysts said foreigners' appetite for risks has eased woes over emerging markets.
"Concerns have been eased over the economic slowdown of China, which takes up the largest portion amid investment into emerging markets," researcher Lee Hyun-joo at Woori Investment & Securities said.
China's purchasing managers' index (PMI) for the manufacturing sector in March inched up by 0.1 point to 50.3.
Researcher Oh Seung-hoon at Daishin Securities also said foreign investors are eyeing emerging markets again.
"They bought advanced markets' stocks and sold emerging markets' last year. Now the global economy is improving and stock prices in emerging markets have become low, so they are coming back to the emerging ones," he said.
Oh said foreigners started to buy Southeast Asian stocks in February, but began buying Korean ones only recently.
"The purchase of Korean stocks is based on expectations of China's stimulus programs, as investors expect Chinese authorities to take actions to prevent the country's growth from shrinking," he said.
Economists said the KOSPI is likely to rise above the 2,000 market, but it remains to be seen whether the foreign buying spree will push the KOSPI up over 2,050, the ceiling which has not been broken for the last three years.
"Korean stocks have merits in valuation, so investors will continue to buy if their preference for emerging markets continues," economist Jung Dong-hyu at Eugene Investment & Securities said.
"The index fell in the fourth quarter of last year following the earnings shock of Samsung Electronics. But it seems the company's first-quarter profit will meet market expectations," Jung said.
He said the company's announcement of first-quarter earnings on Tuesday will be the critical point to determine whether the KOSPI will keep rising. In the recent buying spree, foreigners spent about half of their investments on Samsung Electronics.
However, Oh said Samsung Electronics and other companies' first-quarter profits will meet expectations because those expectations are low.
"For the KOSPI to break 2,050, companies will have to show signs of recovery and the outlooks for their earnings will have to stop falling further. But the signs are still weak. We expect their profits will start to go up in the third quarter," Oh said.
Korean stocks are expected to continue to rise and break the 2,000 mark in the coming weeks on the back of foreigners' buying spree, analysts said Friday.
Analysts are forecasting foreigners will keep buying Korean stocks for a while as the global economy is showing signs of picking up and investors are returning to emerging markets.
The benchmark KOSPI Friday inched down 5.61 points, or 0.28 percent, to 1,988.09.
The index surpassed the 2,000 mark at one point on Wednesday for the first time this year, and on Thursday as well. It has remained below that mark since the first day of the market opening on Jan. 2.
Foreigners led the buying ― they net bought Korean stocks for eight consecutive days, totaling 1.96 trillion won. Their purchase increased the KOSPI from around 1,940 to near 2,000.
Analysts said foreigners' appetite for risks has eased woes over emerging markets.
"Concerns have been eased over the economic slowdown of China, which takes up the largest portion amid investment into emerging markets," researcher Lee Hyun-joo at Woori Investment & Securities said.
China's purchasing managers' index (PMI) for the manufacturing sector in March inched up by 0.1 point to 50.3.
Researcher Oh Seung-hoon at Daishin Securities also said foreign investors are eyeing emerging markets again.
"They bought advanced markets' stocks and sold emerging markets' last year. Now the global economy is improving and stock prices in emerging markets have become low, so they are coming back to the emerging ones," he said.
Oh said foreigners started to buy Southeast Asian stocks in February, but began buying Korean ones only recently.
"The purchase of Korean stocks is based on expectations of China's stimulus programs, as investors expect Chinese authorities to take actions to prevent the country's growth from shrinking," he said.
Economists said the KOSPI is likely to rise above the 2,000 market, but it remains to be seen whether the foreign buying spree will push the KOSPI up over 2,050, the ceiling which has not been broken for the last three years.
"Korean stocks have merits in valuation, so investors will continue to buy if their preference for emerging markets continues," economist Jung Dong-hyu at Eugene Investment & Securities said.
"The index fell in the fourth quarter of last year following the earnings shock of Samsung Electronics. But it seems the company's first-quarter profit will meet market expectations," Jung said.
He said the company's announcement of first-quarter earnings on Tuesday will be the critical point to determine whether the KOSPI will keep rising. In the recent buying spree, foreigners spent about half of their investments on Samsung Electronics.
However, Oh said Samsung Electronics and other companies' first-quarter profits will meet expectations because those expectations are low.
"For the KOSPI to break 2,050, companies will have to show signs of recovery and the outlooks for their earnings will have to stop falling further. But the signs are still weak. We expect their profits will start to go up in the third quarter," Oh said.
![[INTERVIEW] Virtual K-pop group MAVE: is more than just pretty pixels](https://img.koreatimes.co.kr/upload/thumbnailV2/bcc387606cf7451c94f51a5978960c9f.jpg/dims/resize/178/optimize)
