Kosdaq Hit the Lowest Point… 50.21

With the news of impending U.S. military retaliation against the terrorist attacks, the nationan`s financial market plunged again. As the Kosdaq index hit the lowest record ever, and the exchange rate of won against the dollar rose up, the financial market repeated the `panic` situation of the two previous days. On the other hand, the profit rate of circulation of the treasury bond dropped to the lowest level in record.

The Kosdaq index dropped 3.98 points (7.34 percent), closing at 50.21 yesterday. This was the lowest record since July 1997 when the Kosdaq market first began the trade. The Korea Ordinary Share Price Index also dropped 16.96 points (3.4 percent), closing at 482.29.

The Kosdaq index once plunged to 49.31, but barely maintained the 50 line at the last moment. With the uncertainty of the international financial markets due to the U.S. retaliation, the mindset of dumping of the stocks dominated the market. Furthermore, the rumors that some of the listed companies may go bankrupt added pressure to the plunge. A total number of 620 business items, including 330 lower price business items, plunged.

Although the Korea Ordinary Share Price Index showed a good start with 497.15 points with just down 2.1 points, it barely maintained the 480 point line as individuals investors started to dump the stocks due to the plunge of the Kosdaq market.

While the Korea Ordinary Share market and the Kosdaq market sold 92.8 billion won and 20.3 billion won, respectively, foreigners and individual investors bought shares amounting to 90 billion won from both markets taking advantage of low price purchase.

While the Hynix Semiconductor plunged to the lowest price, Samsung Electronics, Pohang Iron Manufacture, and SK Telecom fell down within a narrow range as foreigners bought them in low price. In the Kosdaq market, Ahn Cheol-Soo Research Institute and the security equipment company called 3R went up in the midst of the plunging market.

Meanwhile, the currency exchange rate of won against dollar closed at 1296.3 won, 5.7 won up from the previous day. Starting at 1289.5 won, 1.1 won down from the previous day, the rate once rose to 1299.2 won. The currency exchange rate went up because oil companies bought dollars, while export companies restrained the sales of dollars. As the bond market continued to remain strong due to the expectation for the U.S. interest rate cut, while showing an inactive transaction, the profit rate of circulation of the treasury bonds, which has three-year expiration term, closed at 4.92 percent, 0.07 percent down from the previous day. This broke the record 4.94 percent on August 22nd. The profit rate of the corporate bonds, which has three-year expiration term, also closed at 6.35 percent with 0.07 percent down nearing the lowest record (6.33 percent).

Park Hyeon-Jin witness@donga.com