The South Korean stock market had been bullish throughout last week. Investors' confidence was lifted by expectations for smooth trade negotiations between the United States and China, announcement of the U.S.’ provisional agreement on budgets and a bullish Chinese stock market based on electrical and electronics stocks. Accordingly, the domestic stock market closed higher despite the fact that foreigners went on a selling spree and institutional investors dumped shares massively for profit-taking.
The benchmark Korea Composite Stock Price Index (KOSPI) gained 1.02 percent, while the secondary Korea Securities Dealers Automated Quotations (KOSDAQ) rose by 1.85 percent. Most industries showed a bullish trend, with securities gaining 9.93 percent, construction 5.67 percent, non-metallic mineral products 5.23 percent and pharmaceuticals 5.2 percent.
The domestic equity-type funds as a whole gained 1.11 percent during the week, according to KG Zeroin Co.’s data based on posted prices as of Feb. 15. Ownership-type stocks of equity-type funds all showed a positive return. Small and medium-sized funds gained 1.39 percent, KOSPI 200 index 1.04 percent, regular stocks 0.86 percent and dividend stocks 0.6 percent.
The domestic bond market has also firmed up. It began to turn bullish due to concerns over the economic slowdown caused by the downward readjustment of economic growth projections of major countries, including the United States, Europe and Britain, and a drop in interest rates of U.S. government bonds earlier last week. The investor sentiment preferring risk-free assets alleviated thanks to the U.S.’ provisional agreement on budgets and expectations for smooth trade negotiations after the middle of the week, but it closed higher due to the limitation of increases. By maturity, the interest rate of one-year treasury bonds recorded 1.759 percent, down 1.3 basis points from a week ago, while that of three-year ones fell by 1.3 basis points to 1.787 percent. Five-year and 10-year treasury bonds also saw their interest rates drop by 1.9 basis points to 1.855 percent and 1.2 basis points to 1.980 percent, respectively.
The domestic bond-type fund market gained 0.07 percent over the past week. Bond-type funds all showed a positive return. Mid-term bond funds gained 0.13 percent, gilts 0.1 percent, regular bonds 0.06 percent and ultra-short-term bonds 0.04 percent.
Global stock markets mostly showed a bullish trend. The Dow Jones Industrial Average rose with the talks to avoid the Trump government’s second shutdown and favorable views on the trade negotiation. The Shanghai Stock Exchange Composite Index also showed a steady rising tendency with the rising stock market last week after Chinese New Year. Russia's RTS indexmoved downward again due to poor performance of energy companies after international oil prices rebounded.
Overseas equity-type funds rose by 1.56 percent for the week. By sector, consumer goods showed the highest growth at 1.18 percent. By type, overseas equity-oriented balanced funds had the largest increase with 1.20 percent, followed by overseas bond-oriented balanced funds with 0.33 percent, overseas real estate funds with 0.12 percent, overseas bond funds with 0.01 percent and commodity funds with minus 0.21 percent.
The contract amount of domestic public offering funds came to 205.39 trillion won (US$182.41 billion), up 8.06 trillion won (US$7.16 billion) from a week earlier, according to the data from Zeroin as of Feb. 15. The amount of net assets rose by 8.77 trillion won (US$7.79 billion) to 216.42 trillion won (US$192.20 billion). The contract amount of equity-type funds decreased by 61.30 billion won (US$54.44 million) to 31.23 trillion won (US$27.74 billion), while the amount of net assets increased by 240.10 billion won (US$213.23 million) to 30.68 trillion won (US$27.25 billion). The contract amount of bond-type funds grew by 425 billion won (US$377.44 million) to 19.86 trillion won (US$17.64 billion), and the amount of net assets rose by 449 billion won (US$398.76 million) to 20.48 trillion won (US$18.19 billion). The contract amount of real estate-type funds remained the same from a week ago and the contract amount of money market funds increased by 7.78 trillion won (US$6.91 billion).
The contract amount of overseas public offering funds based on Zeroin’s type classification, excluding off-shore funds, stood at 35.77 trillion won (US$31.77 billion), up 25.10 billion won (US$22.29 million). The contract amount of overseas equity-type funds went down by 46 billion won (US$40.85 million) to 21.69 trillion won (US$19.26 billion). The contract amount of overseas bond-type funds grew by 33.40 billion won (US$29.66 million), while that of overseas equity-oriented balanced funds dropped by 12.40 billion won (US$11.01 million). In addition, the contract amount of other overseas funds increased by 23.70 billion won (US$21.05 million). By ownership, the net assets of Chinese equity funds rose by 194.40 billion won (US$172.65 million), while that of Russian equity funds fell by 10 billion won (US$8.88 million).