KOSPI market cap plunges 1.2 quadrillion won in seven-trading-day rout

[Financial News] The market capitalization wiped out from South Korea’s stock market as the KOSPI plunged for seven consecutive trading days is estimated at about 1,168 trillion won.
That is a substantial amount, exceeding the total market capitalization of the stock markets of most emerging mid-ranking countries. As selling pressure mounted, particularly on large-cap stocks, semiconductor shares among the largest by market capitalization—including Samsung Electronics and SK hynix—posted declines approaching double digits, dragging the index down to the 5,500 level.
As of 10:24 a.m. on the 15th, the KOSPI stood at 5,538.12, down 470.69 points (7.83%) from the previous trading day. Compared with its closing level of 6,941.39 on the 2nd, just before the consecutive plunge began, the index had fallen by more than 1,400 points.
On the 2nd, the KOSPI’s market capitalization was 5,774.7114 trillion won. As the decline continued, it had fallen to 4,957.1139 trillion won at the close on the 14th. That was a drop of about 817.6 trillion won from the peak.
The sharp decline continued on the 15th. At 10:24 a.m. that day, the KOSPI was down 7.83% from the previous trading day, falling to the 5,500 level. Applying the index’s decline to the market capitalization recorded on October 2 puts the intraday market capitalization at an estimated 4,607 trillion won. The cumulative decline from the peak thus widened to about 1,168 trillion won. This is an estimate obtained by simply applying the intraday index decline to market capitalization, however, and may differ from the exchange’s actual figures.■ Market-cap decline exceeds the total size of Mexico’s stock marketThe market capitalization wiped out from South Korea’s stock market in the latest plunge is estimated to exceed the total size of Mexico’s stock market. According to CEIC, Mexico’s stock-market capitalization stood at $656.75975 billion as of July. At an exchange rate of 1,400 won per dollar, that amounts to about 919 trillion won.
By contrast, the decline in KOSPI market capitalization from the October 2 peak was estimated at about 1,168 trillion won as of 10:24 a.m. on the 15th. That is about 250 trillion won more than the entire market capitalization of Mexico’s stock market. In other words, the value wiped out from South Korea’s stock market during seven consecutive trading-day plunges exceeded the size of an entire country’s stock market.
However, the comparison uses Mexico’s stock-market capitalization as of July and an estimate of the decline in South Korea’s market capitalization based on the intraday index movement since October 2, so the periods being compared differ.
The figures may also vary depending on exchange rates and the scope of each market’s coverage. Even so, the fact that the value wiped out from South Korea’s stock market in a short period exceeds the total size of Mexico’s stock market illustrates the impact of the plunge.■ Samsung Electronics plunges 9.27%; SK hynix, 11.38%The declines among semiconductor stocks with large market capitalizations were especially pronounced. Based on screen data at 10:24 a.m., Samsung Electronics was down 9.27% from the previous trading day to 210,500 won. SK hynix fell 11.38% to 257,500 won. Selling was concentrated across large-cap semiconductor stocks, with Samsung Electronics’ preferred shares also down 9.39%.
These large-cap stocks account for a significant share of the KOSPI’s market capitalization, so their falling share prices have a substantial impact on the index. In particular, if Samsung Electronics and SK hynix plunge at the same time, weakness in the semiconductor sector can intensify downward pressure on the broader market, beyond the impact on the individual stocks.
Foreign selling and concerns about the global semiconductor industry outlook are also cited as factors weighing on investor sentiment. However, it is difficult to conclude from individual share-price declines alone that foreign selling was the direct cause of the plunge. Net trading by investor type and movements in the semiconductor sector need to be examined together.
If the KOSPI were to fall to the 5,000 level, the decline in market capitalization could grow further. Assuming the index and market capitalization move in proportion, and using the October 2 market capitalization of about 5,775 trillion won as the baseline, market capitalization at a KOSPI level of 5,000 is estimated at about 4,158 trillion won. The decline from the peak would amount to about 1,617 trillion won.
Even if the index fell further from 5,538.12, its level as of 10:24 a.m., to the 5,000 level, market capitalization could shrink by several hundred trillion won more. This is only an assumption based on applying the index decline to market capitalization; actual market capitalization varies with factors such as individual share prices and the number of shares listed.
The market’s future direction is expected to depend on changes in foreign selling and whether share prices of large-cap semiconductor stocks stabilize. As the steep declines continue, assessing the possibility of further losses in the index will require a comprehensive look at investor flows, the semiconductor industry outlook and corporate earnings forecasts.
[email protected] Kang Jung-mo Reporter