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Kospi flat as institutions offset foreign selling

Dec 19,2017
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Seoul’s main bourse on Monday remained flat despite institutional investors scooping up stocks on the back of expectations for improved Korea-China relations. Institutions net bought 265.3 billion won ($244 million), offsetting foreigners’ net-selling that amounted to 165.2 billion won.

The local currency gained against the greenback.

The benchmark Kospi shed 0.19 points, or 0.01 percent, to close at 2,481.88. Trade volume was moderate at 321 million shares worth 4.4 trillion won, with losers outpacing gainers 510 to 302.

Analysts said Seoul shares closed nearly flat as foreigners offloaded local stakes following anticipation of sweeping tax reforms in the world’s No. 1 economy.

“Although the tax reforms will benefit U.S. companies, it is not a positive event for emerging countries as dollars will shift to the U.S.,” said Rhoo Yong-seok, a researcher at KB Securities.

The sweeping U.S. tax overhaul that reduces the corporate tax rate to 21 percent from the current 35 percent is expected to be passed through Congress this week.

Foreigners sold more shares than they bought at 168 billion won, and individuals also sold a net 128 billion won. Institutions bought a net 265 billion won.

Steelmakers closed mixed, with Posco falling 2.25 percent to 326,000 won while Korea Zinc gained 0.62 percent to 485,000 won.

Tech shares mostly gained ground, with market kingpin Samsung Electronics advancing 1.15 percent to 2,560,000 won, and No. 2 chipmaker SK Hynix increasing 1.98 percent to 77,200 won. LG Electronics, on the other hand, shed 1.42 percent to 104,000 won.

Chemical shares were also winners, with LG Chem moving up 0.89 percent to 397,500 won, and AmorePacific increasing 1.12 percent to 317,000 won.

No. 1 carmaker Hyundai Motor and its auto parts affiliate Hyundai Mobis closed unchanged at 154,000 won and 267,000 won, respectively. Kia Motors advanced 0.15 percent to 33,300 won.

Naver, the operator of Korea’s top Internet portal, was up 1.9 percent to 860,000 won.

The local currency closed at 1,088.50 won against the U.S. dollar, up 1.3 won from the previous session.

Bond prices closed lower. The yield on three-year Treasuries gained 1.2 basis points to 2.090 percent, and the return on benchmark five-year government bonds added 1 basis point to 2.271 percent.


BY KANG JIN-KYU, YONHAP [kang.jinkyu@joongang.co.kr]