Stock prices in South Korea ended higher on Saturday thanks to gains on the news of the issue of bearer bonds and an amnesty for two jailed former presidents of the country.

The two factors combined to outweigh earlier losses stemming from trading suspension of four firms so that the composite index closed 3.17 points higher at 400.19.

This followed heavy losses on Friday when the South Korean currency, the won, fell by more than 10% and stocks dropped by 4% following the result of presidential elections on Thursday.

Brokers said jitters about Kim Dae-jung's victory were again a factor on Saturday as concerns resurfaced about future economic hardship under the International Monetary Fund's proposed rescue plan for South Korea.

The Korea Stock Exchange's decision to suspend trading in the shares of four companies due to financial troubles also pushed the market lower in early morning trading. The four suspended were: Hyusung Motors & Machinery, Dong Sung Co, Seokwang Construction and Chun Kwang Industrial.

However, things improved when the nation's three main political parties announced they had agreed to allow issues of long-term anonymous bonds and delay the implementation of the global tax system.

"The agreement means the virtual abolishment of the real-name financial transaction system. That boosted the market," said Lim Bok-kyu, a broker at Hyundai Securities. Some criticised the real-name system as causing the bottleneck in the financial system by driving ill-gotten money into the underground.

An official at the ruling Grand National Party said the three parties also agreed to pass the 13 financial reform bills in a special parliamentary session next week.

Brokers said the mood of the market also improved with the news that President Kim Young-sam was likely to free jailed former presidents Roh Tae-woo and Chun Doo Hwan early next week. President Kim is granting the amnesty at the request of the president-elect, Kim Dae-jung.
 

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