KOSPI ends 2021 with disappointing performance
A monitor shows the KOSPI's closing price at a dealing room at the headquarters of Hana Bank in Seoul, Thursday. The KOSPI ended this year's trading on Thursday with a 0.52 percent decrease, as it logged 2,977.65. Yonhap
Index ends 2021 below 3,000 points, rising only 1% this year
By Anna J. Park
In the end, there's no Santa Claus rally for Korea's stock markets.
The benchmark KOSPI ended its 2021 trading on Thursday, finishing at 2,977.65 points, a 0.52 percent fall from the previous trading session.
The index rose up to 3,005.36 at around six minutes after the market started at 9 a.m. in the morning, yet it soon turned bearish, continuing to slip down towards the end of the session.
Overseas and institutional investors respectively net-sold 223 billion won ($187 million) and 749 billion won worth of local stocks, while retail investors alone net-purchased 952.9 billion won worth of stocks.
The tech-heavy Kosdaq ended this year's trading at 1,033.98, a 0.58 percent increase from the previous session, with retail investors leading the market by net-purchasing 222.2 billion won worth of stocks while overseas and institutional investors respectively net-sold 25.3 billion won and 189.3 billion won worth of stocks.
Compared to the start of this year's trading, when the KOSPI ended at 2,944.45 on Jan. 4, it only rose by by about 1 percent over the year. The Kosdaq also only rose by 0.4 percent during the whole year's trading. The disappointing index performances are well-reflected in each company's bearish stock price movements throughout this year.
According to the Korea Exchange (KRX), nearly half of listed companies on the KOSPI 200 ― a list of 200 representative companies on the KOSPI from various sectors ― saw their stock prices lower than where they were at the start of this year. In particular, distribution, airlines and pharmaceuticals logged poor performances.
Unfavorable external conditions, such as global concerns over delayed reopening of major countries due to the COVID-19 Omicron variant, as well as upcoming tapering moves, are expected to continue limiting the country's stock market movements early next year. Market analysts emphasized the need to discern companies that continued to yield good earnings with growth expectations.
“As major countries' monetary policies have begun to change direction, stock prices of companies with lower price-to-earnings (PER) ratios have performed relatively better. It seems sectors like bio, blue-chip value stocks, chip manufacturers and real estate investment trusts deserve to receive further interest,” said Hae Jae-whan, analyst at Eugene Investment & Securities.
Other market experts recommend paying attention to stocks whose prices were corrected due to disruptions in the global supply chains, as the disruptions could be ameliorated in 2022.
“Stock prices of semiconductors, cars and IT hardware manufacturers are expected to enjoy upward movements during the first half of next year. Their prices were negatively impacted by the global supply chain crisis, yet the supply chain disruptions are expected to show signs of improvement next year,” said Lee Jae-yoon, analyst from SK Securities.
Meanwhile, the won-dollar exchange rate ended at 1,188.8 won per dollar, an increase by 2.3 won from the previous day.
“The exchange rate fell to 1,182 won at the start of the day's trading, reflecting a weakened dollar. Yet the dollar gained strength again during the trading session,” said Lee Kyung-min, an analyst at Daishin Securities.