Seoul shares surged to a fourth consecutive record close on Monday as Daewoo Shipbuilding jumped 6 percent after raising its target for new orders and announcing its latest ship deal, confirming optimism about the sector. Samsung Electronics Co Ltd extended a recent rally amid expectations for rebounding DRAM chip prices, while Korea Electric Power Corp surged on speculation the state-run electricity provider may list some its units.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.21 percent to end at 1,883.59 points, marking its fourth record close in as many sessions. The index had earlier hit an intraday record of 1,890.83 points, its third in four sessions. The main KOSPI has now advanced for six consecutive sessions, bringing its gains during this period to 8 percent on the back of improving expectations about the both the domestic and the global economies. But some analysts continue to express concerns about the pace of the advance.
"Momentum-driven investment has been a key driver for the market," said Thomas Choi, head of research at PCA Asset Management. "Valuations have become secondary, as have earnings growth potential," he added. "The coming of the end may not be pretty." "The pace of gains in the markets has been much faster than expected, and at this rate we are confident we'll hit 2,000 points this year," said Kim Jeong-hwan, a strategist at Woori Investment and Securities.
Daewoo Shipbuilding and Marine Engineering Co rose 5.84 percent to 61,600 won after saying on Sunday that it had raised its 2007 target for new orders to $17 billion, having achieved its previous target of $11 billion thanks to a boom in container shipping orders.
That Daewoo, the world's second-biggest shipbuilder, also announced earlier on Monday it has won a 1.37 trillion won ($1.49 billion) order to build nine container ships for an unidentified European firm. Samsung Heavy Industries Co Ltd rose 4.6 percent to 54,600 won. The world's no 3 shipbuilder won an order to build an ultra-deepwater rig for Pride International Inc, the US firm said on Friday.
Samsung Electronics rose 2.55 percent to 643,000 won after hitting earlier its highest since December 5, 2006. Citigroup said it remained optimistic about second-half earnings following a recent stronger-than-expected rebound in DRAM chip contract prices.
KEPCO gained 4.42 percent to 42,550 won amid speculation about a listing of its affiliates. The state-run firm owns a nuclear and hydroelectric power generator, as well as five regional non-nuclear generation subsidiaries. LG Telecom Co gained 3.67 percent to 11,300 won, outperforming a 0.30 percent gain in the junior Kosdaq, amid rumours it could be the only bidder in the potential sale of a controlling stake in hanarotelecom Inc.
But LG.Philips LCD Co Ltd fell 0.45 percent to 43,950 won due to caution ahead of its quarterly earnings due Tuesday. The world's second-biggest maker of large-sized LCDs is expected to have swung to a profit, as panel prices bottomed out and demand began to pick up. LG Household and Health Care dropped 4.32 percent to 133,000 won after some analysts cast doubt on the wisdom of its planned acquisition of Coca-Cola Amatil Ltd's South Korean business.
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