KOSPI overtakes the UK to rank No. 8 globally in market cap... Forecasts call for 8,500 by year-end [South Korean stock market grows larger]

The market capitalization of the South Korean stock market has overtaken the British stock market to rank eighth in the world. Foreign investment banks expect the KOSPI Composite Index to rise as high as 8,500 by the end of this year, driven by strength in artificial intelligence semiconductor companies. According to the financial investment industry on the 28th, the total market capitalization of the domestic stock market has jumped more than 45% since the start of the year to $4.04 trillion, or about 5,955 trillion won. Over the same period, the British stock market rose only about 3% to $3.99 trillion. As a result, South Korea has moved ahead of the UK to take eighth place globally.
Until just the end of last year, the British market was about twice the size of South Korea's. But this year, the sharp rise in South Korean stocks reversed the ranking. Taiwan, which is in seventh place, still remains ahead with a market capitalization of $4.48 trillion. The United States ranks first globally with about $75 trillion in market capitalization, followed by China at $14.84 trillion, Japan at $8.19 trillion, Hong Kong at $7.41 trillion, India at $4.97 trillion, and Canada at $4.49 trillion.
In global markets, the rally in South Korean stocks is largely attributed to the strength of AI-related semiconductor companies. Samsung Electronics and SK hynix, the country's flagship chipmakers, have seen their share prices soar on expectations of stronger demand for high-performance memory, lifting the broader market. As of that day, the combined market capitalization of the two companies accounted for 40.8% of the entire KOSPI Composite Index.
For foreign investors, investing in South Korean stocks has largely amounted to a bet on the AI semiconductor industry. Francesco Chan, an emerging markets and Asia Pacific investment specialist at J.P. Morgan Asset Management in Hong Kong, said, "Korea's rapid rise reflects a structural reallocation in global equity markets driven by its dominance in AI hardware, rather than a short-term asset allocation move." He added, "In particular, long-term capital continues to flow in because Korea is benefiting from a supercycle in memory semiconductors."
As the KOSPI Composite Index has recovered to levels seen before the Middle East war, global investment banks have been raising their targets for the domestic market one after another. Goldman Sachs raised its 12-month target for the KOSPI Composite Index from 7,000 to 8,000 in a report released on the 18th local time. Timothy Moe, chief Asia Pacific equity strategist, said the upgrade reflected continued improvement in fundamentals across domestic semiconductors and industrials. He explained, "Given solid fundamentals, attractive valuations and positioning, we maintain an overweight view on Korea in regional market allocation and see significant upside from current levels."
The domestic stock market has delivered strong performance thanks to upward earnings revisions driven by AI-related semiconductor demand, but it is still seen as trading at a discount to global markets.
JPMorgan Chase also raised its target for the KOSPI Composite Index to as high as 8,500 in a report released on the 17th local time. The bank said, "Earnings estimates for this year have been sharply raised by 37%, led by technology stocks and memory semiconductors, which should more than offset global stagflation pressures."
Foreign securities firms are also lifting expectations for individual stocks. Nomura Securities raised its target price for SK hynix on the 24th from 1.93 million won to 2.34 million won, citing expectations that prices for general-purpose DRAM and NAND will rise 51% and 65%, respectively, from the previous quarter. The 2.34 million won target is the highest among domestic and foreign brokerages, ahead of Daol Investment & Securities at 2.1 million won and Korea Investment & Securities at 2.05 million won.
nodelay@fnnews.com Park Ji-yeon Reporter