The KOSPI index has reached a historic milestone by surpassing 8000 points for the first time, establishing a new chapter in market history. Key indicators such as market capitalization, trading volume, investor deposits, and margin loan balances are also setting record highs.
According to the Korea Exchange, the KOSPI, which started the year at 4214.17, closed at 7493.18 on May 15, marking a 77.81% increase since the beginning of the year. After a remarkable 75% rise last year, which made it the top-performing major stock market globally, the KOSPI continues its strong upward trend this year.
Analysts attribute this bullish market to the capital market reforms initiated by the administration of Lee Jae-myung, which include amendments to commercial laws, enhanced protection for minority shareholders, and increased stock buybacks. Additionally, improvements in the semiconductor sector since September of last year have led to a significant upward revision in earnings forecasts for KOSPI-listed companies, driving the market's rise.
By sector, the electronics industry has recorded the highest increase, rising 134.07% since the start of the year. This is followed by construction (109.10%), manufacturing (95.30%), and securities (94.17%). Notably, securities stocks have emerged as key beneficiaries of the trading volume surge and the bullish market sentiment.
The market capitalization of KOSPI-listed companies has also reached unprecedented levels. On May 14, the KOSPI market capitalization hit a record high of 653.67 trillion won, surpassing 6500 trillion won for the first time. This marks an increase of nearly 3000 trillion won from the 347.78 trillion won recorded at the end of last year, achieved in just over five months.
The KOSPI market capitalization first crossed the 4800 mark on January 16, surpassing 4000 trillion won, and exceeded 5000 trillion won on February 25. It then crossed the 6000 trillion won mark on March 6 and reached 7000 trillion won on April 6, reflecting a steady expansion in market size alongside the index's rise.
The global standing of the Korean stock market has also improved significantly, now ranking sixth among major global stock markets, surpassing Taiwan. The domestic market overtook the UK on April 27, Canada on May 7, and Taiwan on May 11. At the end of last year, the Korean stock market was ranked around tenth.
Investor enthusiasm is reaching a fever pitch. On May 12, the KOSPI recorded its highest daily trading volume ever at 67.115 trillion won. From May 1 to May 15, the average daily trading volume for the KOSPI was 52.615 trillion won, significantly higher than the monthly averages of January (27.056 trillion won), February (32.234 trillion won), March (30.143 trillion won), and April (29.551 trillion won).
The amount of idle funds in the stock market has surged as well. According to the Korea Financial Investment Association, investor deposits have remained above 130 trillion won for seven consecutive trading days from May 6 to May 14. This is a sharp increase compared to 57.58 trillion won at the beginning of last year and 89.52 trillion won at the start of this year.
Margin trading has also reached unprecedented levels. The balance of margin loans in the domestic stock market exceeded 35 trillion won for the first time on April 23 and surpassed 36 trillion won on April 29. As of May 14, the margin loan balance reached a record high of 36.4698 trillion won.
The share of foreign investment has also increased. Foreign ownership of KOSPI market capitalization has recently surpassed 37%, reaching its highest level in nearly six years. This influx is attributed to significant global passive fund investments in sectors such as semiconductors, finance, and holding companies.
However, concerns about volatility are rising as the market level increases rapidly, with a concentration of investments in major stocks like Samsung Electronics and SK Hynix. These two companies account for nearly 48% of the total KOSPI market capitalization.
On May 15, the KOSPI opened at 7951.75, down 29.66 points (-0.37%) from the previous trading day, but briefly surpassed 8000 points due to strong individual investor buying. However, profit-taking led to a sharp decline of 488.23 points (-6.12%), closing at 7493.18.
The KOSPI experienced extreme volatility on May 12, when it briefly soared to 7999 points before plummeting to 7421.71.
On this day, the KOSPI 200 Volatility Index (VKOSPI) reached 74.71, marking the third-highest level in the past year. The VKOSPI has remained above 70 for four consecutive trading days since May 12, indicating a simultaneous increase in overheating and anxiety in the market.
* This article has been translated by AI.
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