2007 Bourse Closes With Records
By Yoon Ja-young
Staff Reporter
The stock market closed for the year Friday amid expectations that share prices will make another leap forward in 2008 with the opening of the market on Jan. 2. The main KOSPI index closed at 1,897.13, down 11.49 points, or 0.6 percent, from the previous day, while the junior, tech-loaded KOSDAQ inched up 3.36 points, or 0.48 percent, to 703.01.
Samsung Securities epitomized the 2007 Seoul bourse as an ``infinite challenge.'' It set a number of records through the year.
KOSPI Breaks 2,000
The main index, which started at 1,435.26 in January this year, broke 1,500 on April 9. It continued its upward curve breaking 2,000 for the first time on July 25. It once soared to 2,064.85 on Oct. 31, setting new highs 51 times this year. The lowest number through the year was 1,355.79 on Jan. 10.
The KOSDAQ soared to 828.22 on July 12 from a low of 571.04 on Jan. 23. The market cap combining the main bourse and KOSDAQ also expanded rapidly to 1,055 trillion won from 776.7 trillion won.
The main index fell 125.91 points on Aug. 16 following the U.S. subprime mortgage crisis, the biggest daily fall ever. It has been hovering at around the 1,900-level over the last few months due to the globally weak stock market on subprime mortgage problems and corrections on the Chinese bourse.
Equity Funds Outshine Foreigners
Equity funds were unarguably the major force that drove the indices up. As Koreans switch to diverse fund products from typical savings accounts, equity funds grew to over 114 trillion won, more than double from 46 trillion won a year ago. The number of fund accounts surpassed 20 million.
With the continuous supply of liquidity through the equity funds, institutional investors took over from foreign investors as the major power on the bourse.
Foreign investors, meanwhile, seem to be leaving the Korean bourse. They recorded 24.8 trillion won in net selling on the main bourse, while institutional investors bought 10.3 trillion won in stocks and individual investors bought 6.7 trillion won. The globally weak stock markets following the U.S. subprime mortgage crisis, coupled with the switch to other emerging markets, is causing the exodus, according to analysts.
Shipbuilding, Steel Soar; Banks, IT Plunge
China was the theme of the stock market this year. Industries that benefited from China's rapid economic growth, such as shipbuilding and steel, were leaders of the Seoul bourse. IT, Korea's leading industry, and banks, meanwhile, remained sluggish throughout the year.
For 2008, analysts are making very diverse predictions. While some expect the index to rise up to 2400, some negative scenarios suggest that the bottom could be as low as 1500. Construction, displays and securities are some of the top picks.