Foreign bulls react cautiously to further opening of Korean markets
THE foreign bulls surprised analysts by failing to charge when the ceiling on overseas stock ownership was lifted for the first time since the Seoul market was opened to foreign investment in 1992.
THE foreign bulls surprised analysts by failing to charge when the ceiling on overseas stock ownership was lifted for the first time since the Seoul market was opened to foreign investment in 1992.
Financial authorities have been pondering for months about whether to raise the limit, fearing inflationary pressure from an influx of foreign funds. They subsequently promoted the long-awaited lifting of the ceiling as a further sign of Seoul's commitment to the early opening of its financial markets.
As the authorities lifted the limit on foreign ownership in any single listed company open to overseas investment, from 10 per cent to 12 per cent, the market Composite Index, which had been fluctuating widely through most of the day, dropped 8.2 points to close at 1,066.21. The lifting of the limit made shares worth about US$3.5 billion available to overseas investors.
Analysts such as George Goundry of Jardine Fleming believe the ceiling had yet 'to kick' into the market.
'Also, many fund managers believe Korean stocks are overpriced and are due for correction,' he said.
