Stock Market
Amid the continuous bullish market, some expressed concerns while others suggested the possibility of an additional increase.
Samsung Securities said on April 17, “There are excessive expectations for liquidity in the stock market. The Korean stock market has risen very quickly compared to its fundamentals, and it still has potential uncertainty.”
This is largely due to the overwhelming expectations of the improvement of corporate performance. Yoo Seung-min, chief strategist at Samsung Securities, said, “I find it unconvincing that the corporates’ profits will significantly improve when there is no improvement in its fundamental competitiveness and in sales.”
Also, the movement of foreign investors, who purchased 5 trillion won (US$4.63 billion) since the beginning of the year, should be carefully watched. Yoo said, “With the share being adjusted due to the simple short-term momentum, the buying trend of foreign investors could slow down.”
However, others hinted at the possibility of a short-term adjustment in the KOSDAQ market, which exceed the 700 point mark for the first time in seven years.
IBK Investment & Securities said, “Since the beginning of the year, foreign investors have not shown much interest in the KOSDAQ market, and the institutions are trying to confirm the performance in the first quarter. Investors should single out the ones which have shown good performance rather than the ones going along with the market atmosphere.”
There is also a prediction that it has enough power to rise further. NH Investment & Securities believes that foreign investors recently purchased stocks due to the rising credibility in the Korean stock market, rather than any trend of liquidity.
Kang Hyun-chul, analyst at NH Investment & Securities, said, “Just before six to seven months, foreign investors had great distrust due to the frequent earning shocks in October last year. Compared to that, they now have higher confidence in the rising Korean stock market based on the recent Korean government’s policy and companies’ performance.”