By Yoon Ja-young
Staff Reporter
The Seoul bourse is shining above other bourses on better-than-expected performances of the country's major businesses. The index reflecting the volatility in the stock market has returned to levels seen before the onset of the financial crisis.
The main index KOSPI closed at 1,354.10 Friday, rising 20.4 percent so far this year. The rise is one of the biggest among major global stock markets. Only bourses in China, Taiwan and Brazil have outperformed Seoul. Stock markets of other developed countries, including the United States and Japan, meanwhile, are still below what they were at the beginning of the year.
The top 10 stocks bought by institutional investors recorded a 65.5-percent investment return over the last 50 days.
According to Tong Yang Securities, the VKOSPI, which measures the volatility of the country's top 200 equities, recorded 33.39 as of April 23, nearing the 30.2 of July 2007, before the onset of the U.S. subprime mortgage trouble.
It soared to 82.27 last October when the crisis was at its peak and slid since then to mark below 50 in January and further to below 40 in March and April. A reading below 40 means investor sentiment is stable.
On top of the ample liquidity, good performances of major businesses are sustaining the stock market. Samsung Electronics recorded 470 billion won in operating profit in the first quarter, a sharp rebound from the 740 billion won deficit in the fourth quarter last year. LG Electronics also recorded 455.6 billion won in operating profit, higher than the market consensus of 350 billion won. Hyundai Motor's 153.8 billion won operating profit compares with the deficits of troubled global carmakers GM and Toyota.
According to Tong Yang Securities, 40 out of 64 companies that posted earnings for the first quarter outperformed the market consensus.
``The expectations of improved corporate performances are coming true and working as momentum for further increase. Demand remains stable,'' said Shim Jae-yub, a strategist at Meritz Securities.