Yonhap News
The KOSPI’s daily average trading value surpassed 40 trillion won for the first time this month as the benchmark index extended its record-high rally. However, with trading concentrated in large-cap semiconductor stocks such as Samsung Electronics (005930.KS) and SK hynix (000660.KS), overall market trading volume and turnover declined. While the index surged, the broader market’s “change of hands” slowed due to the concentration in large caps.
According to the Korea Exchange on Tuesday, the KOSPI’s daily average trading value from the 1st to the 22nd of this month reached 48.047 trillion won, the largest monthly figure on record. The previous high was 32.2338 trillion won, set in February this year. The surge is attributed to a rapid inflow of buying into the stock market as the KOSPI continued its strong run, breaking the 7,000-point mark for the first time on the 6th and touching 8,000 intraday on the 15th.
The increase in trading value was led by Samsung Electronics and SK hynix. From the 1st to the 22nd of this month, the combined daily average trading value of the two stocks reached 20.569 trillion won, accounting for 43% of the KOSPI’s total daily average trading value. The concentration of funds in large-cap semiconductor stocks reflects growing expectations for an improved memory chip cycle on the back of expanding artificial intelligence (AI) investment.
While the KOSPI’s overall trading value hit a record high, trading volume declined. During the same period, the KOSPI’s daily average trading volume was 716.8 million shares, down 24% from 947.18 million shares last month. With trading concentrated in high-priced large caps such as Samsung Electronics and SK hynix, trading value swelled significantly even on smaller volumes.
The change of hands in the market also slowed. The KOSPI’s daily average turnover ratio of listed shares from the 1st to the 22nd of this month was 1.15%, 23% lower than the previous month’s 1.49%. The turnover ratio is calculated by dividing trading volume over a certain period by the number of listed shares. A decline in this figure means trading among investors has concentrated in a few stocks rather than spreading actively across the broader market.
Securities analysts expect the large-cap-led market to continue for some time. As individual investors’ purchases of exchange-traded funds (ETFs) have recently increased, supply and demand may concentrate further on large caps, which carry heavy weights in ETFs. When investors buy ETFs, liquidity providers (LPs) buy index constituents in line with their weights to hedge, meaning passive fund inflows directly affect supply and demand for large caps.
The continued upward revision of earnings forecasts for the semiconductor sector is another factor supporting large-cap strength. “If the upward trend in capital expenditure (CAPEX) forecasts of major IT companies continues, the market situation centered on leading stocks will persist,” said Kang Dae-seung, an analyst at SK Securities.
However, some point out that an increase in trading value does not necessarily signal a recovery in overall market vitality. “This year’s rally has continued on the back of corporate earnings and retail investor flows, but for the rally to be sustained, the concentration in a few stocks needs to spread across the broader market,” said Kim Ji-hyun, an analyst at Daol Investment & Securities.
