South Korean market analysts said the national stock market is risky despite the KOSPI reaching record highs [1].
The warning comes as the market experiences a surge that experts said is too narrow to be sustainable. This concentration creates a precarious environment where the broader economy may not be reflecting the actual strength of the index.
The Korea Composite Stock Price Index has more than doubled since the start of 2024 and has risen above the 9,000-point level [1]. However, analysts said this growth is primarily driven by a few semiconductor giants rather than broad-based industrial growth.
Data shows a significant increase in trading activity for specific chip-related stocks. Samsung Electronics saw its average daily trading-volume share rise from 4.95% last month to 6.25% this month [1]. Similarly, SK Hynix saw its share grow from 0.89% to 1.04% during the same period [1].
Samsung preferred shares also saw an increase in activity, with the average daily trading-volume share moving from 0.88% last month to 1.14% this month [1]. These figures suggest that investor interest is heavily clustered in a small number of companies.
Market analysts said this reliance on the semiconductor sector increases the risk of volatility. If the global chip market fluctuates, the entire KOSPI could face a sharp correction because so few other sectors are supporting the current valuation.
Relative market power between the giants is also shifting. SK Hynix's market-cap ratio to Samsung fell to 93% at the end of last month [1]. This volatility among the top-tier stocks further underscores the instability of the current rally.
“The KOSPI has more than doubled since the start of the year and risen above the 9,000-point level.”
The disparity between the KOSPI's record-breaking numerical value and the actual breadth of the market indicates a high level of systemic risk. When a national index is propelled by only a few companies—specifically Samsung and SK Hynix—it becomes a proxy for the semiconductor industry rather than a reflection of the general South Korean economy. This makes the market hypersensitive to chip-sector news, leaving it vulnerable to a sudden crash if semiconductor demand wavers.
