The Korean stock market, particularly the KOSPI index, has seen a notable rise recently, primarily driven by the active buying of foreign investors. This article aims to explain these developments in a way that’s easy to understand, even if you’re not familiar with the intricacies of the stock market or the Korean economy.
What is the KOSPI Index?
First, let’s clarify what the KOSPI index is. The KOSPI index represents the overall movement of stock prices for companies listed on the Korea Exchange. It’s a key indicator of the health of the South Korean economy. When the KOSPI rises, it generally means that the South Korean economy is doing well, while a drop might indicate economic challenges.
The Impact of Foreign Investors
As of 9:05 AM on August 13, 2024, the KOSPI index rose by 12.54 points, or 0.48%, reaching 2,630.84 points. This increase was largely due to the buying activities of foreign investors. On this day alone, foreign investors purchased approximately 642 billion won (about 65 billion yen) worth of Korean stocks, significantly boosting the market. In contrast, domestic institutional investors and individual investors sold 342 billion won (about 34 billion yen) and 108 billion won (about 11 billion yen) worth of stocks, respectively.
Key Companies: Samsung Electronics and SK Hynix
Samsung Electronics and SK Hynix, two of Korea’s most prominent companies, played a crucial role in the KOSPI’s rise. Samsung Electronics’ stock increased by 1.06%, while SK Hynix saw a 2.03% rise. This is partly due to a prediction by the American investment bank Goldman Sachs, which forecasted that NAND flash memory supply shortages would persist through the end of the year, leading to higher prices. NAND flash memory is widely used in smartphones and computers, so any supply issues could significantly impact the entire semiconductor industry.
Other Companies and Market Movements
On the other hand, some major companies such as LG Energy Solution, POSCO Holdings, and Samsung SDI experienced slight declines, around 1%. This was influenced by news from the U.S. that Tesla would not be accepting orders for the lower-priced model of its Cybertruck, leading to a drop in related stock prices.
In addition, shares of Korean biotechnology companies, Samsung Biologics and Celltrion, fell by 0.53% and 0.25%, respectively. However, the automobile manufacturers Hyundai Motor and Kia showed increases of 0.41% and 0.69%, highlighting a mixed performance across different sectors.
The KOSDAQ Market Overview
Korea also has another stock market called the KOSDAQ, which is similar to the NASDAQ in the United States and is known for listing many small and medium-sized enterprises (SMEs) and venture companies. As of August 13, 2024, the KOSDAQ index slightly increased by 0.19 points (0.02%) to 772.91 points. In this market, individual investors purchased stocks worth 205 billion won (
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