Investment Behavior and Special Characteristics of the Korean Stock Market PDF Download

Author: Sei Jong Oh
Publisher:
ISBN:
Category :
Languages : en
Pages : 47

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Book Description

Author: Keunsoo Kim
Publisher: World Scientific
ISBN: 9813236779
Category : Business & Economics
Languages : en
Pages : 293

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Book Description
The Korean stock market, ranked 11th in the world in terms of market capitalization of stocks in 2017, is a globalized market. Foreign investors hold close to one-third of stocks listed on the Korea Exchange (KRX) as of May 2017 (in terms of market capitalization). The US and the UK alone account for almost 50% of foreign ownership in the KRX.Research or information on the Korean stock market, however, is not well known to the domestic or the global investment communities. There are minimal investment studies that deal with practical issues from the perspective of investment analysts. This volume bridges the academic and investment communities by providing analyses of the Korean stock market that contain practical values.This book comprehensively analyzes anomalies in the Korean stock market, including time series anomalies such as the January effect, cross-sectional anomalies such as the size effect and book-to-market effect, and anomalies related to corporate events. The authors also investigate sales revenue, profitability, valuation (M/B ratio), and the financial risk of listed companies in the Korean stock market at both the sectoral level and industrial level.As the study uses a comprehensive data set and long-term sample period, readers can benefit from consistent and comparable empirical results.

Author: Sung Soo Koh
Publisher:
ISBN:
Category : Capital market
Languages : en
Pages : 298

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Book Description

Author: Seungho Jung
Publisher: International Monetary Fund
ISBN: 1557759677
Category : Business & Economics
Languages : en
Pages : 36

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Book Description
We investigate how corporate stock returns respond to geopolitical risk in the case of South Korea, which has experienced large and unpredictable geopolitical swings that originate from North Korea. To do so, a monthly index of geopolitical risk from North Korea (the GPRNK index) is constructed using automated keyword searches in South Korean media. The GPRNK index, designed to capture both upside and downside risk, corroborates that geopolitical risk sharply increases with the occurrence of nuclear tests, missile launches, or military confrontations, and decreases significantly around the times of summit meetings or multilateral talks. Using firm-level data, we find that heightened geopolitical risk reduces stock returns, and that the reductions in stock returns are greater especially for large firms, firms with a higher share of domestic investors, and for firms with a higher ratio of fixed assets to total assets. These results suggest that international portfolio diversification and investment irreversibility are important channels through which geopolitical risk affects stock returns.

Author: In-Man Song
Publisher:
ISBN:
Category :
Languages : en
Pages : 18

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Book Description
A stock market liberalization is a decision by a country's government to allow foreigners to buy securities in that country's capital market. This study examines how the liberalization of the Korean stock market affected stock price behavior and changed the role accounting information for investment decisions. The Korean stock market opened its door to foreign investment in 1991. Prior to this, market inefficiencies, such as the co-movement of stock prices with industry or market indices or investment based on rumor and speculation, were widespread. Since the opening of the stock market to foreigners, a more rational pricing behavior has emerged. This setting provides a unique opportunity to investigate how stock price behavior has changed with market liberalization and what was the role of accounting information in this process. Our results indicate that the co-movement behavior of stock prices by industry decreased and stock price differentiation based on individual firm characteristics increased after market liberalization. The results also show that the explanatory power of accounting numbers increased after market liberalization. Overall, the results imply that foreign investors contributed to the improvement of market efficiency with the opening up of capital markets in Korea. We believe that our results provide useful evidence to other capital markets that are in a similar situation.

Author: Soo-Hyon Lim
Publisher:
ISBN:
Category : Investments, Foreign
Languages : en
Pages : 324

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Book Description

Author: Woochan Kim
Publisher: OECD
ISBN:
Category : Financial crises
Languages : en
Pages : 40

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Book Description
Different categories of foreign portfolio investors in Korea have differences as well as similarities in their trading behavior before and during a currency crisis. First, non-resident institutional investors are always positive feedback traders, whereas resident investors were negative feedback (contrarian) traders before the crisis but switch to be positive feedback traders during the crisis. Second, individual investors herd significantly more than institutional investors. Non-resident (institutional as well as individual) investors herd significantly more than their resident counterparts. Third, differences in the Western and Korean news coverage are correlated with differences in net selling by non-resident investors relative to resident investors.

Author: Kwangsoo Ko
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
The rise of institutional investors in stock ownership is a common phenomenon observed around the world, and the importance and influence of foreign investors is also increasing, especially in Asian markets. This study examines the characteristics of institutional and foreign investor stock ownership, and the stock price performance according to their ownership for two major Asian markets, Japan and Korea. Overall, foreign investors show more apparent preference for stocks with large capitalization and low book-to-market ratio than do institutional investors. In Korea, foreign investors also show preference for stocks with a high return-on-equity. The analysis of abnormal returns using the Fama-French three-factor model shows that stocks with simultaneously high institutional and foreign ownership significantly outperform those with low ownership of that type. The differences in abnormal returns are more evident for foreign ownership portfolios than for institutional ownership portfolios, especially in Korea. If we consider either institutional or foreign investors, the differences in abnormal returns remain still significant in Korea, but not in Japan. Both institutional investors' incentive for stock holding and the extent of stock market efficiency would be the possible explanations for the different results between Japan and Korea.

Author: Sushil Bikhchandani
Publisher:
ISBN:
Category : Capital market
Languages : en
Pages : 38

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Author: Mr.Angel J. Ubide
Publisher: International Monetary Fund
ISBN: 1451844646
Category : Business & Economics
Languages : en
Pages : 67

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Book Description
After years of strong performance, Korea’s economy entered a crisis in 1997, owing largely to structural problems in its financial and corporate sectors. These problems emerged in the second half of that year, when the capital inflows that had helped finance Korea’s growth were reversed, as foreign investors—reeling from losses in other Southeast Asian economies—decided to reduce their exposure to Korea. This paper focuses on the sources of the crisis that originated in the financial sector, the measures taken to deal with it, and the evolution of key banking and financial variables in its aftermath.