It has been a volatile year for the Seoul stock market, in sync with the financial fallout on Wall Street.
According to the Korea Exchange, the benchmark KOSPI lost more than 40 percent between January and the end of December. The main bourse started this year by closing at 1,853 points on January 2nd. On Monday, it finished at 1,117. In the meantime, the tech-loaded KOSDAQ suffered a loss of over 53 percent during the corresponding period. In line with equity markets worldwide, the Seoul bourse has gone through a rollercoaster ride on US credit woes stemming from subprime mortgage defaults.
The trouble in the world's biggest economy has sent shock waves across the globe including Korea after the KOSPI hit a record high of 1,888 in mid-May this year. The ripple effect generating from the domino collapse of once-prominent investment banks on Wall Street put the KOSPI and the KOSDAQ on a downward spiral. The demise of Lehman Brothers, once the fourth largest investment bank that filed for chapter 11 bankruptcy, raised concerns over the soundness of the global financial system, while causing stock markets to freefall further.
This trepidation sent the KOSPI into a nosedive below the psychologically-important level of 1,000 points to 939 at the end of October, the lowest level this year. This is the first time for the market to fall below the 1,000 mark since 2005. The lowest record for the tech-heavy KOSDAQ, meanwhile, was 261 last October.
Pension funds, the biggest savior in times of worsening market conditions, could not in the end help avert a downturn, further ignited by foreign investors' selling spree. Foreigners have so far unloaded Seoul shares worth 33.8 trillion won, or about 26.7 billion US dollars, this year, the biggest net selloff since the exchange began compiling the data in 1998. Their investment in Seoul stocks fell below 30 percent of market capitalization for the first time since 2001. Market capitalization of the KOSPI and the KOSDAQ lost more than half to some 619 trillion won, or about 490 billion US dollars.
Park Hyongki, Arirang News.
DEC 31, 2008
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Arirang Town
Wednesday, FEB 10, 2010, (KST) 
