November 14th, 2008 | by admin |
*KOSPI gains 1.59 pct
*Shipbuilders rise, but outlook still weak
*Builders up after some property tax laws challenged
(Updates to midmorning)
By Park Jung-youn
SEOUL, Nov 14 (Reuters) - Seoul shares traded higher onFriday, snapping a three-day losing streak during which the indexshed 6 percent, with big gains in Wall Street overnight lendingsupport.
The Korea Composite Stock Price Index .KS11 was up 1.59percent at 1,105.73 points as of 0053 GMT, down from an earlier3.8 percent gain to a high of 1,129.40 points.
"We are seeing some gains after the surge in U.S. markets,but Wall Street's had very volatile trading, and gains will bemodest in Seoul markets as sentiment remains fragile," said ParkSuk-hyun, a market analyst at Eugene Investment & Securities.
Analysts said the latest batch of measures by the governmentaimed at boosting market liquidity would have limited impact.
South Korea's financial regulator said on Thursday thatcentral bank and the finance ministry planned to provide $16billion in foreign currency liquidity to exporters and importers.[ID:nSEO239365] It also said the government plans to set up a 10trillion won ($7.19 billion) fund to invest in bonds in a bid tohelp ease the liquidity squeeze at many localcompanies.[ID:nSEL000348]
"These measures are positive developments, but will not beenough to solve the problems that abound in financial markets andthe economy today. Unless global investors' rush towards safehavens alleviates ... stocks will continue to struggle," Park ofEugene Investment added.
Institutions and foreign investors were sellers of net 160billion won ($115.1 million) and 40 billion won, respectively.Retail investors were net buyers of 225 billion won.
Shipbuilders rallied after their latest sharp falls, withDaewoo Shipbuilding & Marine Engineering (042660.KS: Quote, Profile, Research, Stock Buzz) soaring14.65 percent on news that preferred bidder Hanwha Group signed amemorandum of understanding to acquire a controlling stake inDaewoo.
"Shipyards' gains have nothing to do with fundamentals. Theiroutlook has become quite dismal. It looks like retail investorsare picking up shipbuilding shares as they'd fallen a lot, butneither institutions nor foreign investors are buying," said YoonPil-joong, an analyst at Samsung Securities.
Hyundai Heavy Industries (009540.KS: Quote, Profile, Research, Stock Buzz) was up 10.76 percent andSamsung Heavy (010140.KS: Quote, Profile, Research, Stock Buzz) advanced 9.39 percent.
Meanwhile construction firms managed to eke out some gainsafter the constitutional court found some current property taxlaws unconstitutional, a ruling that could favour propertyowners.
"We still don't expect property demand to recover over thenear term due to uncertainties over individual households' futurecash flows," Bryan Song, an analyst at Merrill Lynch, said in anote.
Hyundai Engineering & Construction (000720.KS: Quote, Profile, Research, Stock Buzz) was up 4.13percent and Daewoo Engineering & Construction (047040.KS: Quote, Profile, Research, Stock Buzz) was up4.02 percent.
Blue-chip large cap issues also rose as investors sought outvalue shares after losses on the week, with Hyundai Motor(005380.KS: Quote, Profile, Research, Stock Buzz) rising 3.8 percent and POSCO (005490.KS: Quote, Profile, Research, Stock Buzz) up 2.8percent.
(Editing by Jonathan Hopfner)