South Korea Stock Market Rises
SEOUL, South Korea (AP) _ Stock prices climbed today _ the first day of trading in 1998 _ as foreign investors snapped up blue chips and domestic investors followed suit in an apparent reflection of growing confidence in South Korea’s economy.
The benchmark Korea Composite Stock Price Index rose 9.18 points, or 2.43 percent, to close today’s half-day session at 385.49.
It was the market’s first reaction to news that major international banks had pledged fresh financial support for the country. South Korea’s stock market had been closed for the New Year’s holidays.
``This is a good start for the new year,″ said Paek Jung-hyun, an analyst at Samsung Securities Co.
Buying by foreign investors exceeded selling by $19.6 million, Paek said. Domestic investors also were bullish on blue chip shares, which led the day’s index increase.
Major foreign banks have been discussing ways to help South Korea navigate its pressing credit crunch. Proposals include swapping the country’s foreign bank debt for up to $20 billion in Korean government-guaranteed bonds.
On Friday, representatives from the banks met again in New York, but no concrete plan emerged, said a source familiar with the talks.
The aid would come on top of an unprecedented $57 billion bailout from the International Monetary Fund. In return, South Korea has promised to restructure its financial markets and make it easier for foreigners to take over Korean companies.
``The market is waiting for mergers and acquisitions by foreigners,″ said Jo Seong-min, an analyst at Shinyoung Securities Co. ``They will bring badly needed foreign capital into the market.″
Foreign firms scouting around for possible targets are looking especially hard at the nation’s ailing banking industry. The government said Friday it will complete the takeover of its two most debt-laden commercial banks _ Korea First Bank and Seoul Bank _ next month and sell them to foreign investors.