- Both the Korea Stock Price Index (KOSPI) and the KOSDAQ Comp Index enjoyed their continued extraordinary bullishness throughout the week.
- The Korea Treasury Bond futures market showed its upward trend over the week in spite of the heightened hope for the early upturn of the domestic economy.
- The USD/KRW futures market kept up the upward movement during the week following that of the previous week.
KOSDAQ50 Index Futures Market
This week, in the KOSDAQ50 futures market, the current month contract KQ203 skyrocketed by 7.15 points or 5.71 percent compared to the previous weeks closing. In the mean while, both the Korea Stock Price Index (KOSPI) and the KOSDAQ Comp index enjoyed the continued extraordinary bullishness throughout the week, closing the week at 895.98 points, up 35.62 points or 4.14 percent and 94.30 points, up 4.95 points or 5.50 percent from the previous week respectively.
The major reasons for the strength are follows:
- Growing expectation for the early economic recovery in Korea and the US - Korea's export for the 4Q of 2001 grew 3.7 percent from the 4Q of 2000, better than estimated result of 3.1 percent
- Huge amount of net purchasing by the institutional and individual investors in the Seoul bourse summing up to KRW 133.1 billion and 52.8 billion respectively during the week, while foreigners kept their net-selling position but weaker than the previous week
- Ample liquidity in the cash markets thanks to the increased inflow of money to the ITCs and the securities companies
Korea Treasury bond Futures Market
Against the previous week's downward trend, the Korea Treasury Bond futures market showed its upward trend over the week in spite of the heightened hope for the early upturn of the domestic economy, which has been partly proven in the bullish local stock market, where the KOSPI hit its 18 months record high of 895.98 point on Friday.
Eventually, the lead month contract, KTB206 raised 27 ticks during the week to reach at 102.63 on Friday.
The major factors for the upward trend in the KTB futures market are as follows:
- Weak US bond market in spite of the improvement of the US economic indicators
- Growing concern over the possibility that the current low-interest policy is probably going to change with the inauguration of the bank of Korea's new governor
Meanwhile, March 19 was the last trading day for the KTB203 contract.
USD/KRW Currency Futures Market
The USD/KRW futures market kept up the upward movement during the week following that of the previous week. The current month contract USD204 increased by KRW 5.7 or 0.43 percent during the week inching up and down in an extremely narrow range of KRW 1,328.1 to KRW 1,330.8 per USD. Finally it closed the week at KRW 1,330.8 per USD, the highest figure of the week.
The major factors behind the KRW weakness are as follows:
- Weakened Japanese Yen on rumored downgrading on Japanese governmental credit grade by rating agencies
- Continued net selling by foreign investors in the Seoul main bourse totaling up to KRW 84.2 billion during the week (However, it was much less than the previous week's level of KRW 823.5 billion.)
On the other hand, Mar. 18 was the last trading day for the USD203 contract.
