KOSPI Hits Record Trading Value Amid Deepening Concentration in Select Stocks

South Korea's benchmark stock market index, the KOSPI, has set a new record for average daily trading value this month, surpassing 40 trillion won. As of March 22nd, the KOSPI's average daily trading value reached 48.047 trillion won, breaking the previous record set in February, which stood at 32.2338 trillion won.

However, investment funds have heavily skewed towards a select few large-cap semiconductor stocks, leading to a decrease in overall stock market liquidity, measured by the rate of ownership changes. During this period, the combined average daily trading value of Samsung Electronics and SK Hynix amounted to 20.569 trillion won, accounting for 43% of the KOSPI's total average daily trading value. This trend is attributed to expectations of improved earnings for semiconductor companies driven by a surge in AI demand.

Despite the surge in trading value, the average daily trading volume for the KOSPI from March 1st to the 22nd decreased by 24% to 716.8 million shares, compared to 947.18 million shares in February. The average daily turnover rate of listed stocks also fell by 23% to 1.15%, down from 1.49% last month, indicating a slowdown in market vitality due to the concentration in large-cap stocks. The flow of retail investment funds, increasingly channeled through ETFs, has continued to drive this concentration towards large-cap stocks with significant related weightings.

Kim Ji-hyun, a researcher at Daol Investment & Securities, emphasized that for the rally to be sustained, the concentration in a few select stocks needs to broaden across the entire market.