The KOSPI index exceeded the 3,000 level for the first time in three and a half years. The Korea Exchange evaluated that there are differences compared to when the KOSPI index hit its all-time high in 2021, including the investment environment, supply and demand entities, and stock composition.
According to the Korea Exchange on the 20th, the KOSPI index closed at 3021.84 that day. It has been three and a half years since December 28, 2021. The market capitalization of the KOSPI market set a new all-time high at 2.472 trillion won.
The KOSPI index first broke the 3,000 level on January 7, 2021. On July 6 of that year, it surged to an all-time high of 3,305. However, it then turned to a downward trend and continued to move within a box range of 2,200 to 2,800.
The Korea Exchange cited the investment environment as one of the differences between the current and 2021's bull market. At that time in 2021, the KOSPI index rose due to a surge in global liquidity following the COVID-19 pandemic, while this year, it believes that internal factors such as the resolution of domestic political uncertainty and expectations for the new government's market activation policies are significant.
The entities in the supply and demand were also different. In 2021, the so-called "Donghak Ant Movement" highlighted the buying trend of individual investors. In 2021, the proportion of retail investors in trading volume reached 69%, while institutions and foreigners accounted for 14% and 15.9%, respectively.
This year, institutions and foreigners are leading the rise in the index. Compared to 2021, the proportion of individual investors in trading volume has decreased to 48.7%, while the proportions of foreigners and institutions have increased to 31.8% and 18%, respectively.
There are also differences among the top market capitalization stocks in the KOSPI market. Samsung Electronics and SK hynix remain in first and second place, respectively, but Hanwha Aerospace has risen to fifth amid a defense industry boom. Financial stock KB Financial and shipbuilding stock HD Hyundai Heavy Industries ranked eighth and tenth by market capitalization, respectively.
In contrast, the secondary battery sector, which led the rally in 2021, has underperformed this year. At that time, LG Chem ranked third in market capitalization, but LG Energy Solution, which was newly listed after partitioning, is now fourth. Samsung SDI, which was sixth, has fallen out of the top ten.
The KOSPI index has recorded a 12% increase this month, ranking first among the major 20 country (G20) stock indices. There is a large gap with Canada's TSX index, which ranks second with a growth rate of 1.3%. Since the beginning of this year, it has also ranked first with a growth rate of 25.9%, surpassing Russia's RTSI index, which was previously first at 24.52%.
The Korea Exchange noted that expectations for a "honeymoon rally" remain high. This is due to the firm commitment to capital market revitalization through the new government's shareholder-friendly policies and eradication of unfair trading. Historically, the stock index has averaged a 3-4% increase in the month following a presidential election, and has risen by 14-16% one year later.
However, the Korea Exchange explained that there are also cautionary factors, such as the need for profit-taking, given the rapid increase in a short period. In particular, if U.S. economic indicators worsen or if external conditions such as tariff negotiations and geopolitical instability in the Middle East shake, short-term adjustments may occur.