Korea wins over investors
Jane Lee
SEOUL, January 18: Foreign investors who abandoned Korea Inc last year as its economy spiralled into crisis have been streaming back this month, hopeful that the worst of the storm has passed.But analysts and brokers warn that labour strife or bad news from talks next week on extending South Korea's short-term debt could send foreign funds fleeing again at record speed. The stock market has soared since the beginning of the year due to a local buying frenzy fuelled by foreign buying, brokers say. Seoul's composite stock index stood at 495.91 points on Saturday, up more than 40 per cent since mid-December when it closed at a decade low of 350.68. Net foreign buying so far this month stands at 904 billion won ($565 million). However, analysts and brokers said the inflow of cash, mostly from the United States, was largely a bet on the won's recovery and cautioned that no one was certain how long the funds would remain. "I think there's a broadly held perception that the currency may have bottomed, andI think that is as much of an attraction -- namely the potential upside of the currency -- if not more than the stocks themselves," said Richard Samuelson, head of research at SBC Warburg in Seoul. In 1997, the won tumbled against the dollar from a year high of 840 in January to a historic low of 1,995 in December, a fall of almost 60 per cent. It has been trading between the 1,500 and 1,700 level this month.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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