Seoul shares sail past 2,000-mark on foreign, pension funds demand

Business & Markets 2013
Written by Reuters
Wednesday, 29 May 2013 16:47
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SEOUL (May 29): South Korean shares closed at a two-month high on
Wednesday as risk appetite improved, with foreign investors and
pension funds piling into tech and auto stocks following a global rally
overnight.
Sentiment was further boosted by a government announcement that the
national pension service, the world's fourth-largest, plans to boost the
weighting of stocks and alternative assets in the total while cutting that
of bonds.
The Korea Composite Stock Price Index finished up 0.75 percent at
2,001.20 points, the highest close since end-March.
"Strength of foreign money inflow today seems to signify appetite for
risk has somewhat revived," said Bae Sung-young, a market analyst at
Hyundai Securities, adding that the share market's attractive valuation
was helping it draw interest.
Foreign investors were buyers of a net 355.6 billion won worth of
stocks, the biggest daily foreign net buying amount in nearly three
months.
Pension funds bought a net 28.3 billion won, emerging as net buyers for
a sixth straight session.
TECHNOLOGY [] and auto stocks advanced, with LG Display rising 3.9
percent and Kia Motors gaining 2.8 percent.
But shares in Korea Electric Power Corp tumbled more than 5 percent to a 5-1/2-month closing low, weighed down by news
of nuclear reactor shutdowns.
South Korea said it was suspending the operations of two nuclear power reactors and extended a shutdown of a third to
replace cables that were supplied using fake certificates, dragging KEPCO to a five-month low.
"Nuclear power plants are very energy-efficient, and the shutdown of reactors in the high energy-demand season is
worrisome. Supply may come short," said Lee Hak-moo, an analyst at Mirae Asset Securities.
Shares in Samsung SDI rose 4.6 percent to a near 2-month closing high, as shutdown of nuclear reactors sparked hopes of
strong sales of the battery maker's energy storage system products, analysts said.
"Potential energy supply problems point to strong sale of its energy storage system products," said Hwang Joon-ho, an
analyst at KDB Daewoo Securities.
CONSTRUCTION [] firms gained on signs of a revival in the domestic real estate sector and expectations of fresh overseas
orders.
"We are hearing overseas construction deals are close to being signed. Growing warmth in domestic real estate sector is
helping smaller construction firms," said Park Sang-yeon, an analyst at Shinhan Investment Corp.
Daelim Industrial Co Ltd closed up 3.4 percent after the builder said on Wednesday it won a 578.2 billion Korean won order
from the Kuwait National Petroleum Company.
Shares in Doosan Engineering & Construction rose 5.4 percent and GS Engineering & Construction ended up 2.3 percent.
The KOSPI 200 benchmark of core stocks closed up 0.9 percent, while the junior KOSDAQ edged 0.01 percent lower.
Move on day +0.75 percent
12-month high 2,042.48 3 January 2013
12-month low 1,758.99 25 July 2012
Change on yr +2.1 percent
All-time high 2,231.47 27 April 2011
All-time low 93.10 6 January 1981