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Market cap set to top 1,000 trillion won again
Writer : Sender
Jul 28, 2010
The total value of shares listed on Korea's main stock market is likely to soon break 1,000 trillion won. The lofty mark was crossed in 2007.
The market capitalization of the listed stocks has steadily increased for most of July to reach almost 976 trillion won ($812 billion) on Tuesday.
It represents close to a 5 percent increase from 929.5 trillion won on July 1, according to the Korea Exchange.
Together with the market cap, the benchmark Korea Composite Stock Price Index (KOSPI) has been rising in July, finishing Tuesday at 1,768.31, compared to 1,686.24 on the first day of the month.
The rosier economic outlook for the second half is now boosting the forecast that the market capitalization would soon reach 1 quadrillion won.
Many securities firms have so far predicted that the second half will show another good performance with the KOSPI reaching as high as 2,000 points. Kyobo Securities said Tuesday in a press briefing that it expects the benchmark index to reach 2,000 as the global economy is recovering and developed countries will maintain record low interest rates.
IBK Securities also said that the KOSPI can increase up to 1,870 points in August while Solomon Investment and Securities said that it would surge through 2,000.
When the market cap was worth more than 1 quadrillion won in October 2007, the KOSPI exceeded 1,900. Now that the index is below 1,800 points, the high amount of liquidity in the stock market comes as a surprise.
Joo Sang-chul, senior strategiest at Kyobo Securities, said the amount of the listed stocks has increased as companies have issued new shares to increase their capital with the listing of the country's largest insurer Samsung Life Insurance on the bourse in May.
Joo says that the market capitalization hitting 1 quadrillion won would be positive for the Korean economy. "When the size of the stock market expands, the companies can borrow from the market relatively easily," he said.
(Source: The Korea Times)
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