S Korea small-cap rotation leads to biggest gain

Bloomberg

Global investors are snapping up small-cap stocks in South Korea as they rotate out of big companies listed on the main Kospi index after 2017’s 20 percent rally and amid optimism about the government’s plan to stimulate the tech-savvy market next year. Foreigners bought $88 million of shares in the Kosdaq gauge, helping push up the index 3.9 percent. They sold 109 billion won of Kospi stocks.
Investors are “taking dividends and profits from large-cap Korean names after a strong 2017, and focussing on tech and biotech Kosdaq names,” said Sat Duhra, a fund manager with Henderson Global Investors in Singapore. Demand was driven by speculation that the country’s top pension fund may buy more Kosdaq stocks, he said.