Breaking through the 6000-point barrier! South Korea's stock market "leads the world in bullishness" with a market capitalization surpassing that of the French stock market

Caixin February 25 News (Editor: Xiaoxiang) The Korea Composite Stock Price Index (KOSPI) reached a new milestone on Wednesday—its first time surpassing 6,000 points—just a month after breaking the previously unimaginable 5,000-point barrier. This surge was mainly driven by a global spike in demand for storage chips, boosting the stock prices of Korea’s two major chip giants, Samsung Electronics and SK Hynix.

Market data shows that the Korea Composite Index rose more than 2% intraday, reaching a record high of 6,144.71 points at one point during trading. With the benchmark KOSPI index up nearly 45% since 2026, it has become one of the best-performing major markets worldwide.

Note: Orange indicates KOSPI index trend According to industry summaries, the market capitalization of South Korea’s stock market has now exceeded $3.76 trillion, an increase of about $2.23 trillion since early 2025. Currently, South Korea’s market cap has surpassed France’s stock market, ranking ninth globally. Earlier, in late January, Korea’s market cap overtook Germany’s, making it a historic top ten global market.

Note: In the chart above, black represents South Korea’s market cap, orange for Germany’s, gray for Bloomberg France Exchange; the lower chart shows Germany, Korea, and France GDP sizes from largest to smallest. Analysts point out that although Korea’s stock market has long been overlooked by foreign funds due to undervaluation, it is now becoming an increasingly prominent star in the global market. The so-called “AI panic trading” has proven to be beneficial for Korea’s stock market, as software stocks play a secondary role, while hardware manufacturers continue to drive the market higher.

Corporate governance reforms have also contributed to the rally. It is expected that the Korean National Assembly will pass a bill later Wednesday requiring companies to cancel treasury stock. Treasury stock refers to shares repurchased by the company from the open market and held in treasury. In many markets, these are seen as temporary tools that are eventually canceled to boost shareholder returns. However, in Korea, they are often held indefinitely.

The U.S. Supreme Court’s decision last week to overturn President Trump’s reciprocal tariffs is also seen as a boost for Korea’s stock market this week.

Matthews Portfolio Manager Tiffany Hsiao predicts, “Korean exporters tied to U.S. consumer demand—especially in electronics and components—will benefit from reduced tariff uncertainty.”

Jung In Yun, CEO of Fibonacci Asset Management Global, said, “As the Korea Composite Index reaches 6,000 points, the upside may become more gradual, with sustainability depending on profit realization and whether the market can expand beyond a few semiconductor heavyweight stocks to broader sectors. Without such support, some sectors may consolidate or rotate, which is not unusual.”

Can the momentum continue?

Early signs suggest that retail investors in Korea, who traditionally preferred U.S. stocks over domestic ones, are returning to the local market. If this trend persists, it could drive the next wave of gains.

Of course, given the rapid rise of the Korean stock market over the past few months, some market observers are closely watching valuation levels.

Wilson Asset Management Portfolio Manager Matthew Haupt said, “I considered buying KOSPI futures, but given the relative gains over the past month, initiating new long positions now is a tough decision.”

Since early 2025, Samsung’s stock price has nearly quadrupled, while SK Hynix’s stock has surged about sixfold.

However, most analysts remain generally optimistic, citing that these two leading Korean chipmakers are likely to continue benefiting from ongoing storage chip shortages and AI demand.

Citi Group and Macquarie Capital both raised their target prices for these two Korean chip giants this week, with Macquarie’s forecast for Samsung Electronics suggesting a potential 65% upside from current levels.

In terms of the broader market, Nomura Securities recently raised its target for the Korea Composite Index to 8,000 points for the first half of this year, citing factors such as the memory supercycle, AI capital expenditure chains, strong defense sector profits, and valuation reappraisal of the physical AI supply chain.

Nomura analysts Cindy Park and Dongmin Lee wrote in their report, “If Korea can accelerate corporate value reforms and structural improvements in the KOSDAQ market, we expect valuations to further reshape above 8,000 points.” They added that reaching 8,000 points depends on whether the Korean government can implement multiple revisions to the Commercial Act to fulfill promised reforms.