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The Korea Futures Exchange Weekly Bulletin: January 14 To January 18

Date 24/01/2002

KOFEX appointed Jung-Ho Kang (53), the former President and CEO of the KOSDAQ Market Inc. to the CEO and Chairman of one of the fastest growing futures and options exchanges in Asia On Jan. 18.

The KOSDAQ50 futures market showed a continued strong downward trend, which has began late in the previous week.

KTB203 inched up and down in a relatively quite narrow band of 103.29 to 103.63 finishing the week at 103.49, down 6 ticks from the previous weekend with an average daily trading volume of 77,174 contracts.

The USD202 represented an upward movement following the previous week's ascent.

KOFEX To Name Jung-Ho Kang As the 3rd CEO and Chairman of The Exchange

On Jan. 18, KOFEX called a General meeting and appointed Jung-Ho Kang (53), the former President and CEO of the KOSDAQ Market Inc. since April 1999, to the new CEO and Chairman of one of the fastest growing futures and options exchanges in Asia.

After getting approval of the appointment from the Ministry of Finance and Economy of Korea, he will officially take office as the CEO and Chairman of KOFEX on Jan. 21.

"KOFEX will be trying to do its best in order to offer investors not only a wider array of investment means and chances to hedge risks but also guaranteed stable and fare trading circumstances by listing more competitive futures and options products." said the new leader of KOFEX at a press interview.

Also, regarding the transfer of the KOSPI200 Futures and Option temporarily listed on the Korea Stock Exchange until the end of the 2003 to KOFEX, he said that "We are going to set up a task-force team dealing with the KOSPI200 Futures and Options transfer this year for a successful transfer of the world's most actively traded derivative products."

KOSDAQ50 Index Futures Market

This week, the KOSDAQ50 futures market showed a continued strong downward trend, which has began late in the previous week. The recent month contract, KQ203 (a contract with the adjusted multiplier of KRW 200,000) plunged by 4.5 points or 4.36 percent from the previous weekend during the week to reach at 98.50 points on weekend.

More significantly, on Thursday, the March KOSDAQ futures contract broke the 100-point level for the first time since Dec.28, 2001 falling by 1.25 points at 99.75 points. Only, on Monday and Wednesday, the KQ203 slightly increased by 0.30 points and 0.55 points respectively in response to the sudden collapse.

The major reasons for the descent in this week are as follows:

  • The freefall of the NASDAQ Comp Index plunging by 92.46 points or 4.55 percent during the week at 1930.34 points on Friday from 2,022.46 points the previous weekend thanks to the growing expectation that the recovery of the US economy will take longer than expected even if the US IT related companies represented positive earning performances for 4Q of 2001
  • Comment by Greenspan warning that the US economic recovery still unclear
  • Continued foreign selling in local stock markets
At the same time, both the KOSPI and the KOSDAQ Comp Index also fall steeply by 18.89 points or 2.59 percent and 3.00 points or 3.99 percent closing the week at 708.47 points and 72.02 points respectively.

Korea Treasury bond Futures Market

During the week in the KTB futures market, the lead month contract KTB203 inched up and down in a relatively quite narrow band of 103.29 to 103.63 finishing the week at 103.49, down 6 ticks from the previous weekend with an average daily trading volume of 77,174 contracts worth KRW 7,985 billion.

On Monday, the KTB March contract started the week with some strength due mostly to the Greenspan's gloomy view about the US economic recovery. However toward the close of the trading, the KTB203 turn downward influenced by the strong local stock market finishing the day at 103.29.

However, from Tuesday through Wednesday, the KTB203 contact showed the upward trend increasing by 34 ticks at 103.63 on Wednesday caused by the weak local stock markets and the growing demand for bonds thanks to greater short-term liquidity as a result of the return of capital into the ITCs.

After the two-day ascent, the KTB203 turned downward toward the weekend falling by 14 ticks finishing the week at 103.49, down 6 ticks from the previous weekend in spite of several market friendly factors such as the cancelled MSB auction by government and sufficient market liquidity.

USD/KRW Currency Futures Market

The lead month contract, USD202 this week continued the upward movement following the previous week's ascent. The USD202 contract increased by KRW 4.0 this week to reach at KRW 1,323.5, on Friday, compared to the ascent of KRW 6.8 recorded in the previous week.

The main factors behind the continued Korean Won weakness are as follows:

  • Huge amount of net selling by foreign investors in domestic stock markets
  • Recovery of the USD price to the 132-Yen level toward the weekend after the USD falling to the 131.23 Yen per USD on Tuesday
The volume in the USD/KRW futures market totaled 28,123 contracts this week worth KRW 1,856 billion. In addition, Jan.14 was the last trading day of the USD201 contact.