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Seoul shares sail past 2,000-mark on foreign, pension funds demand
May 29, 2013 / 7:17 AM / 4 years ago

Seoul shares sail past 2,000-mark on foreign, pension funds demand

* Foreign net buying amount biggest in nearly 3 months

* KEPCO shares tumble, Samsung SDI jumps on nuclear reactor shutdown

* Builders, exporters gain firmly

SEOUL, May 29 (Reuters) - South Korean shares closed at a two-month high on Wednesday as risk appetite improved, with foreign investors and pension funds piling into tech and auto stocks following a global rally overnight.

Sentiment was further boosted by a government announcement that the national pension service, the world’s fourth-largest, plans to boost the weighting of stocks and alternative assets in the total while cutting that of bonds.

The Korea Composite Stock Price Index finished up 0.75 percent at 2,001.20 points, the highest close since end-March.

“Strength of foreign money inflow today seems to signify appetite for risk has somewhat revived,” said Bae Sung-young, a market analyst at Hyundai Securities, adding that the share market’s attractive valuation was helping it draw interest.

Foreign investors were buyers of a net 355.6 billion won worth of stocks, the biggest daily foreign net buying amount in nearly three months.

Pension funds bought a net 28.3 billion won, emerging as net buyers for a sixth straight session.

Technology and auto stocks advanced, with LG Display rising 3.9 percent and Kia Motors gaining 2.8 percent.

But shares in Korea Electric Power Corp tumbled more than 5 percent to a 5-1/2-month closing low, weighed down by news of nuclear reactor shutdowns.

South Korea said it was suspending the operations of two nuclear power reactors and extended a shutdown of a third to replace cables that were supplied using fake certificates, dragging KEPCO to a five-month low.

“Nuclear power plants are very energy-efficient, and the shutdown of reactors in the high energy-demand season is worrisome. Supply may come short,” said Lee Hak-moo, an analyst at Mirae Asset Securities.

Shares in Samsung SDI rose 4.6 percent to a near 2-month closing high, as shutdown of nuclear reactors sparked hopes of strong sales of the battery maker’s energy storage system products, analysts said.

“Potential energy supply problems point to strong sale of its energy storage system products,” said Hwang Joon-ho, an analyst at KDB Daewoo Securities.

Construction firms gained on signs of a revival in the domestic real estate sector and expectations of fresh overseas orders.

“We are hearing overseas construction deals are close to being signed. Growing warmth in domestic real estate sector is helping smaller construction firms,” said Park Sang-yeon, an analyst at Shinhan Investment Corp.

Daelim Industrial Co Ltd closed up 3.4 percent after the builder said on Wednesday it won a 578.2 billion Korean won order from the Kuwait National Petroleum Company.

Shares in Doosan Engineering & Construction rose 5.4 percent and GS Engineering & Construction ended up 2.3 percent.

The KOSPI 200 benchmark of core stocks closed up 0.9 percent, while the junior KOSDAQ edged 0.01 percent lower.

Move on day +0.75 percent

12-month high 2,042.48 3 January 2013

12-month low 1,758.99 25 July 2012

Change on yr +2.1 percent

All-time high 2,231.47 27 April 2011

All-time low 93.10 6 January 1981 (Reporting by Jungyoun Park; Editing by Sanjeev Miglani)

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