Seoul shares posted their highest close in 13 months on Monday, fuelled by technology issues as Samsung Electronics posted its highest finish ever on an increasingly bullish sector outlook. The Korea Composite Stock Price Index (KOSPI) ended up 1.98 percent at 1,612.22 points, rising for a third straight session and setting its highest finish since late July 2008.
"As global equities are showing signs that they are headed for further rebounds, the Seoul market sentiment has turned positive as well," said Kwak Joong-bo, a market analyst at Hana Daetoo Securities. "But the index has gained quite a lot, and may face some heavy fund redemption at the benchmark KOSPI's 1,600 point level," Kwak added.
Foreign investors were buyers of a net 323.6 billion won worth of stocks, and analysts said foreign buying would probably continue fuelling Seoul markets. "Foreign net buying year-to-date is not even half of what investors sold in the past two years and foreign ownership is still below its historical average," Citigroup said in its report dated August 21.
Shares in Samsung Electronics, the world's No 1 memory chip maker and the largest share on the KOSPI, rose 3.43 percent after hitting an all-time high of 785,000 won. Its market cap stood at 115.3 trillion won ($92.75 billion), accounting for 13.74 percent of the main index. And analysts said further gains were ahead.
"Looking at company fundamentals - we are looking at third quarter operating profit on a consolidated basis of 4 trillion won - Samsung Electronics shares at the range 800,000 won and 900,000 are justified even now," said Lee Seung-woo, a senior technology analyst, Shinyoung Securities. But some of the key risks included forex swings and existing macroeconomic uncertainties, according to Kim Gee-soo, a senior technology analyst at Goodmorning Shinhan Securities.
Shares in Hynix Semiconductor, the world's No 2 memory chip maker, rose 4.82 percent. Meanwhile brokerage issues spiked on expectations rising commissions in a bull market would help their earnings. Market turnover stood at 8.7 trillion won, compared with the July daily turnover average of 5.57 trillion. Shares in Samsung Securities, South Korea's top brokerage by market value, jumped 5.01 percent and Daewoo Securities rallied 9.09 percent.
Elsewhere shares in Cheil Industries Inc surged 8.92 percent on hopes of continued strong earnings for the third quarter. The Samsung Group affiliate, which produces electronic materials for clients such as Samsung Electronics reported a record 1.09 trillion won ($875.7 million) in sales and 80.5 billion won ($64.67 million) in operating profit for the second quarter, and analysts said its earnings momentum looked likely to continue.
"Third-quarter sales and operating profit are seen setting new records led by its display and semiconductor materials products," said Hwang Yoo-sik, an analyst at SK Securities. Institutions were sellers of 267.13 billion won worth of stocks, and retail investors were buyers of a net 49.9 billion won worth of stocks. Advancers led decliners 442 to 376, with 67 counters ending flat.
A total of 534.3 million shares worth 8.7 trillion won changed hands, compared with 507.3 million shares worth 8.04 trillion won traded on Friday. The KOSPI 200 September futures index rose 3.90 points to 210.00, while the KOSPI 200 spot index went up 4.34 points to 210.60. The junior Kosdaq market fell 0.15 percent to 511.36 points.