Stocks close highest in 68 months

Dealers stand in front of an electronic sign at KEB Hana Bank headquarters in Seoul, Tuesday. The KOSPI closed at 2,178.38, up 0.99 percent. / Yonhap

Samsung Electronics’ market cap nears W300 trillion won

By Park Hyong-ki

Seoul stocks closed at the highest level in 68 months, rising above 2,180 points during the session on foreign and institutional buying Tuesday.

Their net purchases also boosted Samsung Electronics shares to reach a record, trading above 2,130,000 won.

The benchmark KOSPI closed at 2,178.38, up 0.99 percent, the highest closing in five years and eight months. The tech-heavy KOSDAQ ended up 0.10 percent at 609.73.

Foreign investors turned bullish immediately after they sold local shares worth over 84 billion won on Monday. Foreign investors, who are hunting for bargains, bought KOSPI shares worth 360 billion won Tuesday.

Analysts say foreign investors will continue to search for opportunities in the local equity market as stocks here still remain undervalued compared to global shares.

“The market can expect foreign investors’ stable purchases of Korean shares. They are likely to stand out as they remain undervalued,” said Oh Tae-dong, an analyst at NH Investment & Securities.

Also, analysts say that investors are optimistic about the latest decision on the impeachment ruling of President Park Geun-hye and the U.S. Federal Reserve’s rate hike.

The impeachment has eased political uncertainty, and the rate hike points to a positive economic outlook for the U.S. The Fed raised its federal funds rate by 0.25 basis points.

Samsung Electronics closed at 2,128,000 won, up 1.58 percent.

Korea’s biggest tech share broke its previous record of 2,125,000 won on March 17.

Its market cap reached almost 300 trillion won, accounting for about 21 percent of the KOSPI. This is close to the record 23 percent set in April, 2004, according to the Korea Exchange.

Samsung Electronics repurchased and retired around 5 percent of its shares over the last year and a half as part of its shareholder-friendly policy.

Share buybacks and retirement mean fewer shares to trade on the market, which would boost its price.

This in part helped boost its share price, along with a positive outlook for its chip business.

Korean exports began seeing a rebound led by chips and displays early this year. Exports are expected to increase by about 13 percent this month, from a year ago. This would mark the third straight month of double-digit growth.

“We expect the number of Samsung Electronics shares to be further reduced. This and its positive earnings outlook have spurred its price,” said Kwak Hyun-soo, an analyst at Shinhan Investment.