The South Korean stock market has seen a significant increase this year, surpassing the UK market and climbing one position in the global major market rankings to 8th. Experts believe this is due to the inflow of international funds into semiconductor stocks during the AI boom.
On the morning of the 28th, the KOSPI climbed to 6,712.73, reflecting a 1.5% increase during intra-day trading. By 10:30 a.m., it remains volatile near the 6,695 mark. Although individual and foreign investors have been selling, institutional investors, including pension funds, are net purchasers.
As reported by Bloomberg News on the same day, the overall market value of the South Korean stock market rose by more than 45% this year, reaching $4.04 trillion (around 5,955 trillion South Korean won). In the same timeframe, the UK stock market’s market capitalization grew by roughly 3% to $3.99 trillion. South Korea surpassed the UK, climbing one position in the global major stock market rankings to take 8th place.
Only a few months ago, the scenario was different. Back then, the UK stock market was approximately double the size of South Korea’s. Nevertheless, South Korea’s strong recovery this year swiftly narrowed the difference. Nonetheless, the Taiwanese stock market continues to lead South Korea, with a market value of $4.48 trillion (ranked 7th).
Bloomberg linked the rise in South Korea’s stock market to the impressive showing of AI-focused semiconductor firms. It noted that top stocks like Samsung Electronics and SK Hynix climbed due to hopes for higher demand for advanced memory, pushing the overall market higher.
Two firms represent more than 40% of the overall market capitalization within the KOSPI index, which includes over 830 stocks. For international investors, investing in the South Korean stock market essentially equated to making a significant wager on the AI semiconductor sector.
Some market predictions suggest that the South Korean stock market’s rebound may continue for now. If there are advancements in the semiconductor sector, a recovery in corporate profits, and hopes for broader shareholder returns, foreign investment might keep flowing in. Nevertheless, there are worries that if the focus on certain big-cap stocks grows stronger, market fluctuations could rise.
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