[Weekly Market Review] KOSPI Surpasses 2800 at Year-End... Samsung Electronics and LG Electronics Alternately Hit New Highs

[Asia Economy Reporter Oh Ju-yeon] In the fourth week of December (21-24), just before Christmas, the domestic KOSPI broke through the 2800 mark for the first time in history, staging a year-end rally. Samsung Electronics led the KOSPI 2800 surge. The Samsung Electronics stock price, which had hovered around 73,000 won in mid-December, surged more than 5% in a single day on the 24th (to 77,800 won), rapidly approaching the '80,000 won' mark. On the 23rd, LG Electronics hit the upper limit price following news of establishing a joint venture for electric vehicle powertrains with Magna International, the world's third-largest auto parts manufacturer based in Canada. Expectations for the KOSPI reaching 3000 next year are growing, with a notable feature being institutional investors' net purchases of 860 billion won in the previous week. Institutions had been net selling 1.9 trillion won worth of stocks from the 1st to the 18th of this month.

According to the Korea Exchange on the 26th, the KOSPI in the fourth week of December rose 1.01%, closing at 2806.86 on the 24th from 2778.65 on the 21st. Although the weekly increase was not large, considering it fell 1.6% to 2733.68 on the 22nd before rising, the net gain was 2.67%. This week is particularly notable as the KOSPI surpassed the 2800 mark for the first time ever. Until now, the KOSPI had never exceeded 2800. The ability to reach this 'unexperienced' territory was thanks to Samsung Electronics, which accounts for more than one-fifth of the KOSPI market capitalization, hitting an all-time high and pulling the index upward.

Samsung Electronics' stock price is trending upward due to expectations of increased year-end dividends and improved semiconductor business performance next year. Especially, with the inheritance tax of over 11 trillion won confirmed for Samsung Group Chairman Lee Kun-hee, it is anticipated that the related funds will be secured through dividends, boosting expectations for increased year-end dividends. Alongside this, securities firms have raised their target stock prices sharply to the 90,000 won range, expecting market share expansion in most business sectors next year.

Institutions, which had been selling in December, contrasted by net buying 372.7 billion won worth of Samsung Electronics shares last week, while individuals (239.6 billion won) and foreigners (148.3 billion won) were net sellers.

On the 23rd, the day before Samsung Electronics' sharp rise, LG Electronics heated up the stock market. LG Electronics closed at the upper limit price following news of establishing a joint venture for electric vehicle powertrains with Magna International, the world's third-largest auto parts manufacturer. This was LG Electronics' first upper limit price since October 2008. Consequently, LG Electronics' stock price jumped from 92,200 won on the 22nd to 119,500 won on the 23rd, surpassing 100,000 won in a single day. This was the first time LG Electronics' stock price exceeded 100,000 won since May 2018. Its market capitalization also increased by 4 trillion won in one day, rising from 23rd to 16th place.

LG Electronics and Magna expect their strengths to create optimal synergy in the rapidly growing eco-friendly and electrification parts market, contributing to the business advancement of the joint venture.

Meanwhile, in the KOSPI market by investor type, individuals were net sellers of 905.2 billion won, while foreigners and institutions were net buyers of 50.6 billion won and 860.7 billion won, respectively.

The stocks most purchased by foreigners were Kakao (87.9 billion won), Celltrion (87.4 billion won), Samsung SDI (82.2 billion won), NCSoft (61.7 billion won), LG Chem (44.2 billion won), and Samsung C&T (44.0 billion won). Institutions bought Samsung Electronics (372.7 billion won), KODEX 200 (248.5 billion won), and Kakao (138.1 billion won), among others. Individuals purchased Samsung Electronics preferred shares (238.1 billion won), KODEX 200 Futures Inverse 2X (92.7 billion won), and KODEX KOSDAQ 150 Leverage (64.1 billion won), among others.