The combined market cap of South Korea’s main and secondary stock markets exceeded 2,000 trillion won (US$1.87 trillion) for the first time thanks to a continuous bullish market move.
According to the Korea Exchange (KRX) on Jan. 30, the main KOSPI and the tech-heavy KOSDAQ markets closed on the 29th at a combined cap of 2,019.17 trillion won (US$1.89 trillion (US$1.88 trillion). It took 10 years and seven months for the market cap to double from the 1,000 trillion won (US$932.84 billion) level reached in July 2007.
This is largely due to the fact that the KOSPI index closed at nearly 2,600 on the previous trading day, hitting a new high, and the KOSDAQ index increased a whopping 120 points to over 920 in the past month. The market cap of the KOSPI and the KOSDAQ recorded at 1,688.81 trillion won (US$1.58 trillion) and 330.35 trillion won (US$307.88 billion), respectively, on the 29th.
KOSPI's latest market cap alone exceeded South Korea's gross domestic product (GDP) of 1,638.31 trillion won (US$1,529.7 trillion) last year.
The industry said that the more countries are advanced, the higher their stock market’s market caps are than their GDPs. This is because their companies can easily raise funds and they have more advanced methods to trade stocks.
Countries with advanced capital markets, such as the United States, Japan and the United Kingdom, see their market caps surpass their GDP, while most emerging countries, including China and India, don’t show a higher market cap than their GDPs.