Market Capitalization Surpasses 800 Trillion Won

Korea’s market capitalization surpassed 800 trillion won as KOSPI index recorded an all-time high on Wednesday.

Stock prices soared with recovering investment sentiment due to the settlement of the Korea-U.S. FTA and purchases by foreign investors.

The KOSPI index rose 19.66 points to close at 1,483.41 on Wednesday, breaking the record of 1,470.03 on February 26.

The KOSDAQ index also rose 5.59 points (0.85 percent) to close at 660.81, the highest close since May 17 (671.24).

With the rise in share prices, market capitalization surpassed the 800 trillion won level for the first time since surpassing the 700 trillion won level in December 2005.

Foreign investors concentrated on IT shares, recording a net purchase of 406.3 billion won.

“With the settlement of the Korea-U.S. FTA, relations between the North and the U.S. are expected to improve. Such expectations are positively affecting investment sentiment,” said researcher Kim Hak-gyun at Korea Investment and Securities.

The FTA agreement is expected to positively affect Korea’s national credit rating.

“International credit rating institutions such as S&P, Moody’s, and Fitch gave us a positive evaluation after the settlement of the FTA agreement,” said an official at the Ministry of Finance and Economy.

“S&P and Fitch have no plans to upgrade Korea’s credit rating right away, but they view that the agreement will have a positive impact in the mid to longer term. Moody’s could upgrade Korea’s rating in few months as it has been considering it for some time before the trade deal was finalized,” projected an official at the MOFE.

larosa@donga.com sanjuck@donga.com