SEOUL, May 07 (AJP) - South Korea’s benchmark stock index keeps scaling one record after another, but for many ordinary investors the rally feels increasingly like a private party they cannot afford to enter.
After surging 70 percent last year, the KOSPI has already climbed another 77 percent this year, propelled overwhelmingly by a handful of AI-fueled chip giants. The gains have become so concentrated that while paper wealth has exploded, many retail investors holding smaller stocks say they have been left poorer — or locked out entirely by soaring share prices.
A research report released Thursday by the Bank of Korea warned that the stock boom is increasingly enriching wealthy households and deepening Korea’s already severe asset polarization, long driven by widening real estate disparities.
Individual investors purchased a net 63.6 trillion won ($43.8 billion) worth of stocks between 2020 and 2024, sharply up from just 1.3 trillion won during 2011 - 2019. Yet the gains accrued overwhelmingly to high-income households.
The wealthiest 20 percent of households by net assets accounted for 64.5 percent of all stock holdings, the central bank said. When measured by total assets — including real estate, equities and cash — the concentration became even starker, with the top quintile controlling 73.2 percent of household wealth.
The return gap was wider still. Between 2020 and 2024, the richest 20 percent earned average annual stock profits of 2 million won, far above the national average of 1.12 million won. For the remaining income quintiles, annual stock-related income remained below 400,000 won.
The imbalance has likely intensified further in recent months as shares of Samsung Electronics and SK hynix exploded higher on the back of the artificial intelligence boom.
As of Thursday, Samsung Electronics carried a market capitalization of 1,567 trillion won, while SK hynix stood at 1,175 trillion won. Together, the two companies accounted for more than 45 percent of the KOSPI’s total market value of 6,062 trillion won, up sharply from 34 percent at the end of last year.
Their share prices have more than doubled this year, with Samsung Electronics climbing above 260,000 won and SK hynix topping 1.6 million won. Of the KOSPI’s roughly 1,000 trillion won increase in market capitalization this year, about 800 trillion won came from the two chipmakers alone.
Outside the AI frenzy, however, much of the market continued to follow a sharply “K-shaped” trajectory, with many non-chip stocks declining even as headline indices surged.
“I wanted to invest in the two major stocks, but the share prices were already too high, so I bought other stocks that ended up falling instead,” said Park Min-woo, who described himself as belonging to the second or third income quintile. “The barrier to entry for the core stocks has become too high.”
Among the top 20 KOSPI-listed companies by market capitalization, only Shinhan Financial Group traded below 100,000 won per share.
The rally has also fueled a fresh wave of leveraged speculation. Margin loan balances, which stood at around 16 trillion won at the end of 2024, surpassed 27 trillion won by the end of 2025 and reached 36 trillion won as of Monday. Analysts said the trend reflects both speculative fervor and the growing difficulty retail investors face in accessing the market’s biggest winners.
“We must keep in mind that leveraged investments, such as credit loans, are increasing,” a BOK official said. “A simultaneous decline in asset prices and increase in debt burdens could amplify downward pressure on the economy.”
As wealth polarization deepens, consumer spending has weakened while dependence on asset accumulation — particularly real estate — has intensified. According to the BOK survey, Korean households spent just 130 won for every 10,000 won earned through stock investments, far below comparable figures of 3.2 percent in the United States and 3.8 percent in Germany.
The central bank pointed to property markets as a key driver of the disparity. The share of proceeds from stock and bond sales used for home purchases rose from 4.9 percent in May last year to 8.9 percent in January this year. During the same period, apartment prices in Seoul climbed about 8.7 percent.
The trend runs counter to the government’s longstanding hope that rising stock prices would ease speculative pressure on housing.
According to the KB Financial Group Research Institute, stock-market profits are increasingly flowing back into real estate, particularly among wealthy investors. The institute pointed to a steady migration of equity wealth into premium residential districts across Seoul and the surrounding metropolitan area.
“It is not a new phenomenon for stock market liquidity to move into real estate with a certain time lag,” said Song Seung-hyeon, head of City and Economy. Song warned that as wealthy investors armed with large amounts of “seed money” continue pouring into the housing market, property prices in Seoul and the greater metropolitan area are likely to climb further, widening the asset divide.
For decades, the stock market was viewed as a pathway for lower-income households to build wealth and improve living standards. In today’s market, that ladder appears increasingly difficult to climb.
Copyright ⓒ Aju Press All rights reserved.