In 2014... aside from some high-profile IPOs here and there...
Korea′s stock market remained relatively gloomy.
But many market watchers think...
it will be a different story this year.
Song Ji-sun has this year′s stock market outlook.
2014 was a lackluster year for the Korean stock market.
The benchmark Kospi index closed the year at 19-15, a hundred points lower than it started,
a year after being trapped in the 2-hundred point range and below the 21-hundred point
barrier.
This year, with the country′s economic recovery picking up pace, market analysts expect the
Kospi to break out of this pattern and top 22-hundred, most probably in the third or
fourth quarter.
Among the main factors setting the tone for the market will be the Fed′s decision to
raise its key interest rate and the performance of Samsung Electronics, which accounts for
14-percent of the overall market capitalization.
Many analysts believe the Fed′s rate hike will have a limited impact on the bourse...
but the big question about Samsung is whether it can shrug off its poor smartphone performance
from the third quarter of last year.
"We are expecting a low of 18-70 and a high of 22-60.
There could be some adjustments in the first half following rate changes in the U.S., but
the stock market will rise at a moderate rate in the second half."
One main theme for the market this year will be dividend payments.
Last year, big name IPOs took center stage, partly due to the listing of Cheil Industries,
the de-facto holding company of the Samsung Group, and its affiliate Samsung SDS.
But the number of companies seeking IPOs will drop by half to around 30 this year.
Among them are low-cost airlines Jeju Air and Air Busan and Hyundai Group′s advertising
arm Innocean.
The focus this year will be on how shareholders benefit from a government policy on increasing
dividend payments.
Policymakers have voiced concerns that too many companies are stocking away too much
money for reserves and that Korea′s dividend payout ratio is lower than that of emerging
or developed markets.
"We will seek to increase the influence of shareholders in deciding dividend plans to
make them more reasonable and help institutional investors to become more involved in the process."
Now another point to look out for in 2015 is whether the Korean market can be included
in the developed market category on the MSCI index, which is an important factor when global
fund managers draw up their investment portfolios.
Korea has been regarded as an emerging market largely because of its currency′s limited
convertibility and limits on foreign investors′ ability to trade in securities.
The question of whether Seoul has made progress in improving investment conditions will be
decided in June.
Song Ji-sun, Arirang News.