Seoul bourse expected to gain ground as earnings season nears

SEOUL, June 27 (Yonhap) -- The South Korean stock market is likely to gain some
momentum next week, as investor sentiment is expected to improve ahead of
second-quarter earnings announcements by local firms, analysts said Saturday.
The benchmark Korea Composite Stock Price Index (KOSPI) closed this week at
1,394.53, up 0.81 percent from the previous week.
Due to a lack of particularly positive news, the key index moved in a tight
range. It has stayed below the 1,400-point mark since June 16.
Analysts said that although there is lingering uncertainty surrounding the global
economy, the Seoul bourse may gain some ground next week due to end-of-quarter
window dressing, a strategy used to improve the appearance of a portfolio or
fund's performance.
Towards the end of the year or quarter, portfolio and fund managers will often
sell stocks with large losses and purchase high-flying shares. These securities
are then reported as part of the fund's holdings.
"Shares tend to temporarily rise near the end of the first half of the year,
affected by the window dressing of institutional investors," said Kwon Yang-il,
an analyst at Woori Investment & Securities Co.
The market momentum is also likely to be fueled in anticipation of earnings
reports due over the next several weeks. The South Korean government is also set
to release some reports this week, including its industrial production index.
"The Seoul bourse, which is believed to have passed the worst of the crisis, is
expected to slowly gain momentum on corporate earnings," Kwon said.
ygkim@yna.co.kr
(END)