Opposite Directions
The KOSPI and KOSDAQ are moving in the opposite directions, with the former retaining the 2,000 point mark and the latter drifting sideways. The investor sentiment outlook is not entirely rosy for the KOSDAQ, either.
The Korea Securities Dealers Automated Quotations closed at 545.59 points on May 21, 2.6 percent down from the end of the previous month and 25.64 points short of this year’s high, 571.23, recorded on April 18.
The index, which was at around 560 points late last month, lost no less than 10.78 points on May 19 alone after repeated fluctuations. The drop continued for three days in a row from May 16, too.
The KOSDAQ was about to hit the 600 point mark earlier last year, thanks to the government policy for the assistance of venture firms and small and mid-size enterprises. However, foreign investors rushed out of the bourse in the wake of the Fed’s exit strategy taking concrete shape in the second half.
The future outlook is rather gloomy as well. Institutional investors sold 155 billion won worth of shares during the four trading sessions starting from May 16, although individual and foreign investors recorded purchases of 2.1 billion won (US$2.05 million) and 26 billion won (US$25.4 million), respectively. Besides, most of the companies listed there are expected to come up with lower-than-expected performances.
“The profit estimation error in KOSDAQ was 1.5 trillion won in 2011 but increased to 3.1 trillion won last year,” said Han Beom-ho, senior research analyst at Shinhan Investment & Securities, adding, “The net profit estimates for KOSDAQ companies are likely to be adjusted sharply downward, which could affect investor sentiment.”