Falling Short
It has been found that the South Korean stock market ranked 14th in the world in market capitalization, up one notch in six months, but the amount of its increase for the past five years falls short of those of other major stock exchanges.
According to the Korea Exchange, the market cap of KOSPI- and KOSDAQ-listed companies totaled US$1.2595 trillion at the end of June this year, up 2.3% compared to the end of last year. At the same point in time, the New York Stock Exchange (NYSE) recorded a market cap of US$17.7868 trillion (up 5.2%) to top the list. During the first half of this year, those of the Brazilian and Canadian stock exchanges jumped by no less than 35.4% and 17.4%, respectively.
The global total stock market capitalization edged down by 1.3% during the period from US$67.1 trillion to US$66.3 trillion, which can be attributed to the factors including Brexit. Under the circumstances, the South Korean stock market put up a good defense as IT companies such as Samsung Electronics fared well amid an increase in global liquidity based on central banks’ expansionary monetary policies. In the first half of 2016, foreign KOSPI investors recorded a net purchase of 6.8 trillion won to help raise the index to about 2,010 points.
Nevertheless, things are not that optimistic in the mid to long term. The KOSPI index has moved between 1,800 points and 2,100 points since early 2011 and this has negatively affected the vitality of the market. Compared to the end of 2010, the market cap of the NYSE as of the end of last month increased by 40% and the percentage reached 39% for the Shanghai Stock Exchange and 22% for the Japanese stock market. In contrast, it stood at 15% for the South Korean market.