Semiconductor And AI Gains Drive Record Market Expansion
An index is displayed in the dealing room of Shinhan Bank’s headquarters in Jung District, Seoul, on April 30. On that day, the KOSPI closed at 6,598.87, down 92.03p (1.38%).
As the domestic stock market continues its record-breaking rally, the number of listed companies with a market capitalization of 1 trillion won ($769.23 billion) or more has surpassed 400 for the first time. The total market capitalization of the stock market also exceeded 6,000 trillion won ($4.62 trillion), prompting assessments that the market’s scale has expanded to a new level.
According to the Korea Exchange on May 3, the number of listed companies (including preferred stocks) with a market capitalization of 1 trillion won or more stood at 405 as of April 29. This marks the first time the number of ‘1-trillion club’ listed companies has exceeded 400. By market, there were 267 on the KOSPI, 137 on the KOSDAQ, and 1 on the KONEX. The ‘10-trillion club’ of companies with a market capitalization of 10 trillion won ($7.69 trillion) or more totaled 79. This completely surpasses the levels seen on February 27 (377 in the 1-trillion club and 78 in the 10-trillion club), right before the United States launched its attack on Iran.
The pace of the stock market’s scale expansion has noticeably accelerated. The number of 1-trillion club listed companies first surpassed 200 in 2015, then crossed 300 in July last year after about 10 years, but has now exceeded 400 in just 9 months since then. This is the result of a rapid expansion in the top-tier market capitalization corporate group as stock prices recently surged, centered on semiconductor and artificial intelligence (AI) related sectors.
Despite geopolitical risks originating from the Middle East, the total market capitalization of the domestic stock market exceeded 6,000 trillion won for the first time in history on April 27. This is the result of expectations for major companies’ earnings and improved investor sentiment intertwining to drive up the index. On April 30, the last trading day of last month, the stock market caught a breather, causing the number of 1-trillion club listed companies to decrease slightly to 398. However, the 10-trillion club actually increased by 1 to reach 80, continuing a strong trend centered on large-cap stocks.
By individual stock, Samsung Electronics maintained an overwhelming first place with a market capitalization of approximately 1,289 trillion won ($991.54 billion). It was followed by SK Hynix (approximately 917 trillion won ($705.38 billion)), Samsung Electronics Pfd. (approximately 127 trillion won ($97.69 billion)), SK Square (approximately 111 trillion won ($85.38 billion)), Hyundai Motor (approximately 109 trillion won ($83.85 billion)), and LG Energy Solution (approximately 108 trillion won ($83.08 billion)). Doosan Enerbility (approximately 81 trillion won ($62.31 billion)), Hanwha Aerospace (approximately 73 trillion won ($56.15 billion)), HD Hyundai Heavy Industries (approximately 72 trillion won ($55.38 billion)), and Samsung Biologics (approximately 68 trillion won ($52.31 billion)) also placed their names in the upper ranks. At the bottom of the 1-trillion club, Korea Investment Holdings Pfd. was close to the baseline at approximately 1.0082 trillion won ($775.54 million), while Yujin Robot (approximately 999.7 billion won ($769.00 million)) and Wonik QnC (approximately 999.5 billion won ($768.85 million)) were located at the threshold of the 1 trillion won market capitalization.
The securities industry expects the stock market’s scale and stamina to grow further as the earnings-driven market trend continues. Han Ji-young, a researcher, forecast, “In the recent market, the influence of earnings events centered on global Big Tech has become greater than variables like US-Iran negotiations or monetary policy,” adding, “As hyperscaler companies such as Alphabet, Amazon, and Microsoft show stock price strength following their earnings announcements, there is a possibility that this will stimulate expectations for upward revisions to the profit consensus of the domestic semiconductor sector.”
Yoon Young-sil
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