(LEAD) Seoul shares rise to 15-month high on foreign buying

(ATTN: CHANGES won's closing price in penultimate para, ADDS bond yields at bottom)
SEOUL, Sept. 17 (Yonhap) -- South Korean stocks rallied to a 15-month high
Thursday, lifted by powerful foreign buying, analysts said. The local currency
rose to an over 11-month high against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) climbed 12.14 points, or
0.72 percent, to end at 1,695.47, the highest since 1,717.66 in June 26 last
year. Volume was moderate at 517.6 million shares worth 8.9 trillion won (US$7.4
billion) with losers outnumbering gainers 455 to 363.
After opening above the 1,700-mark for the first time in 15 months, the KOSPI
pared some of its gains in late trading as institutional investors reduced
buying.
"Foreign investors' massive buying led the market gains as their demand for
non-dollar assets increased amid U.S. dollar's global weakness," said Jun Ji-won,
an analyst at Kiwoom Securities.
"Purchasing power of foreign buyers is expected to set the overall tone for the
market as institutional investors remained restrained due to increasing fund
redemptions by retail buyers," Jun said.
Foreigners remained net buyers for a tenth session. They scooped up a net 908
billion won worth of local shares on Wednesday, the largest amount since
mid-October, 2007.
Leading power equipment manufacturer Doosan Heavy Industries & Construction
advanced 5.92 percent to 71,600 won after reporting it has won a US$1.04 billion
deal to build a power plant in Saudi Arabia with affiliated Doosan Infracore
surging 8.86 percent to 19,050 won.
Brokerage houses got a boost as the bullish stock trading is expected to shore up
their profitability. Leading securities firm Mirae Asset Securities rose 7.26
percent to 78,300 won with Samsung Securities jumping 1.92 percent to settle at
74,300 won.
Airline operators also finished higher on expectations a strengthening local
currency will sharply lower their fuel costs. Top carrier Korean Air gained 2.94
percent to end at 49,000 won.
Financial shares lost ground with fourth-largest financial firm Hana Financial
Group falling 2.99 percent to 39,000 won as investors scrambled to pocketed
profits from recent gains.
The local currency ended at 1,204.8 won to the U.S. dollar, up 6.5 won from
Wednesday's close. The unit rose to the strongest level in more than 11 months as
foreigner's demand for the won rose amid bullish stock markets and a weak U.S
dollar.
Bond prices, which move inversely to yields, closed mixed. The return on
three-year Treasuries closed steady at 4.40 percent and the benchmark yield on
five-year government bonds shed 0.04 percentage point to end at 4.82 percent.
pbr@yna.co.kr
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