You are here

Seoul: Stocks wobbly ahead of China MSCI index changes, won edges up

31784840 - 03_06_2014 - msci4.jpg

[SEOUL] Shares in Seoul edged up on Tuesday but gains were capped by worries that the addition of more Chinese firms to MSCI's indexes could draw foreign investors away from South Korean equities.

US index provider MSCI will significantly add to its China A index and include some Chinese firms' American Depository Receipts. The changes will be made as of Tuesday's market close.

The Korea Composite Stock Price Index (Kospi) was up 0.4 per cent at 1,974.68 points as of 0227 GMT.

"The number of Chinese ADRs that will be included in the MSCI is expected to be large. There is a chance foreign investors may dump South Korean equities near end-session if Korean shares become comparatively unattractive," said Park Seok-hyun, a stock analyst at Eugene Investment & Securities.

Offshore investors were set to be sellers, offloading a net 20.6 billion Korean won (S$23.87 million) worth of Kospi shares near mid-session.

Local shares were set to post a second losing month.

Shipping company Hyundai Merchant Marine Co Ltd was up 14.5 per cent, its three consecutive gaining session as media reported it has been making progress in negotiating freight charters.

Builder Doosan Heavy Industries & Construction Co Ltd was up 5.3 per cent after it said it was awarded a 459 billion Korean won order from the Ministry of Electricity & Water of Kuwait.

Advancers outnumbered decliners 446 to 340.

The South Korean won edged up as the US dollar eased broadly, but was set to notch its biggest monthly loss since July last year.

The won stood at 1,188.9 per dollar, up 0.2 per cent compared with Monday's close of 1,191.8.

June futures on three-year treasury bonds gained 0.04 point to 110.19.