KOSPI Closes Up Nearly 2%... Foreigners and Institutions Engage in 'Storm Buying'

[Asia Economy Reporter Hwang Yoon-joo] The KOSPI and KOSDAQ indices closed nearly 2% higher. They rose significantly due to the 'buying' trend by foreigners and institutions. SM Entertainment closed at 131,900 won, far exceeding the tender offer price.

On the 16th, the KOSPI closed at 2,475.48, up 1.96% (47.58 points) from the previous day. It started the day at 2,444.06, up 0.67% (16.16 points), and steadily expanded its gains.

Employees are working in the dealing room of Hana Bank in Jung-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

Supply and demand played a role. Foreigners and institutions net bought 24.8 billion won and 893.1 billion won, respectively. Foreigners showed a 'selling' trend at the market open but switched to 'buying' during the morning. Institutions gradually increased their buying, contributing to the price rise. Meanwhile, individuals alone net sold 936.4 billion won.

All of the top 10 market capitalization stocks closed higher. LG Chem surged by as much as 6.38%. Kia +5.37%, LG Energy Solution +4.17%, Hyundai Motor 3.82%, Samsung Electronics +2.41%, NAVER +2.32% followed in order.

The KOSDAQ closed at 784.71, up 2.51% (19.25 points) from the previous day. It started at 772.17, up 0.88% (6.71 points), and soared sharply.

Foreigners led the KOSDAQ's upward trend. Foreigners and institutions net bought 166.5 billion won and 132.1 billion won, respectively. Meanwhile, individuals alone net sold 360.3 billion won.

All of the top 10 market capitalization stocks also rose. EcoPro surged 11.94%. Next were SM +7.59%, EcoPro BM +4.54%, Pearl Abyss +4.16% in order.

SM Entertainment (SM), recently attracting attention in the market due to a management rights dispute, rose 7.59% to close at 131,900 won. HYBE announced a tender offer plan at 120,000 won per share after acquiring shares from Lee Soo-man, the founder and chief producer of SM. If the stock price is higher than the tender offer price, shareholders have no incentive to participate in the tender offer.

Kim Dae-jun, a researcher at Korea Investment & Securities, explained, "The strong U.S. retail sales in January have raised expectations for a soft landing of the economy, leading to a rebound in the domestic stock market. Foreigners reversed their previous day's stance and net bought more than 1.4 trillion won, driving gains centered on secondary batteries."

Meanwhile, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,284.8 won, up 2.6 won from the previous day.