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By Miyoung Kim
4 Min Read
* KOSPI up for second day, trading near 20-day moving average
* KEB jumps to 1-month peak on $4 bln M&A hopes
* Retail shares up on easing economic worries (Updates to close)
SEOUL, Aug 18 (Reuters) – Seoul shares rose for a second day on Wednesday, with Korea Exchange Bank 004940.KS jumping on hopes for a $4 billion acquisition and foreign investors turning net buyers after five sessions of selling.
The Korea Composite Stock Price Index .KS11 (KOSPI) finished up 0.4 percent at 1,761.99 points, trading just below the key 20-day moving average of 1,765.
“Concerns about an economic slowdown have eased significantly from last week and that led foreign and institutional investors to return to the market and snap up oversold stocks,” said Kim Hyoung-ryoul, an analyst at NH Investment & Securities.
“But we are not completely out of the woods yet and it’s too early to say that the market will regain its rising momentum.
Foreign investors snapped up 137 billion won ($116.5 million) worth of shares and institutions purchased a net 50 billion won.
KEB rose as much as 4.9 percent to a one-month high before closing up 3.2 percent on eased concerns that the stalled sale of the bank may falter after sources said Australia’s ANZ ANZ.AX was expected to decide by mid-October whether to bid for a majority stake in KEB. [ID:nSGE67G0BW]
“The news that ANZ will start due diligence soon is very positive and raised the possibility that the bank could actually bid for KEB,” said Seo Young-soo, a Kiwoom Securities analyst.
“With the Australian dollar firming up against the won and pricing gap with the selling side not so big, ANZ could become quite aggressive and the stalled sale of KEB could progress quickly.”
Retail shares firmed, helped by stronger-than-expected results from two U.S. sector heavyweights.
Shares of Lotte Shopping 023530.KS rose 2.2 percent and Shinsegae 004170.KS added 1.5 percent.
Key technology exporters, however, continued to come under pressure as a stronger won further dimmed prospects for overseas sales. Asia’s biggest technology firm Samsung Electronics 005930.KS shed 0.5 percent and its home rivals LG Display 034220.KS and Hynix Semiconductor Inc 000660.KS dropped 1.4 percent and 1.8 percent respectively.
Hyundai Motor Co 005380.KS, the country’s biggest carmaker, lost 2.2 percent, hit by persistent concerns that the carmaker and its group firms may expand into the non-core construction business by bidding for Hyundai Engineering & Construction 000720.KS.
“Concerns related to the takeover of Hyundai Engineering have been mostly factored into the market but uncertainty over the deal will continue to pressure Hyundai Motor shares,” said Michael Yun, an analyst at Daewoo Securities.
Shares were also pounded by heavy foreign sales as they took advantage of the automaker’s share buyback programme. It is purchasing 1.69 million shares worth some 244.5 billion won until Sept. 27 to distribute to its employees. [ID:nSEU003111] CJ Corp 001040.KS jumped 5.2 percent after the holding company raised its stake in processed food and sugar maker CJ Cheiljedang 097950.KS by selling its overseas feedmaking unit to the sugar producer to enhance synergy between the two units.
CJ Cheiljedang took over CJ Global Holdings from CJ Corp by placing $77 million shares to its top shareholder.
“There’ll be great synergy effects from the deal as CJ Global will help CJ Cheiljedang expand into overseas markets, which have better growth outlook thanks to growing demand for meat and animal feed,” said Judy Kim, an analyst at Woori Investment & Securities.
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