Korea Exchange Market Capitalisation Reach $2.2 Trillion

Undeterred by the economic downturn due to global uncertainty, the combined stock market capitalisation of Korea Exchange crossed $2.18 trillion for the first time at the end of Thursday.

According to the data provided by the bourse operator Korea Exchange, the total market capitalization of stocks listed on the local bourse reached $2.2 trillion as of Thursday’s closing, according to a report in Korea’s English daily Korea Herald.

By market, the benchmark Kospi accounted for $1.89 trillion, while the secondary bourse Kosdaq and Konex, known as a stepping stone market, stood at $300 billion won and $230 billion, respectively.

In recent months, the Kospi has experienced a sharp rally, with its market valuation rising by over $4.4 trillion from around $1.43 trillion at the end of 2024.

The bullish Kospi closed trading at 3,183.23, up 49.49 points or 1.58 percent from the previous trading day. It surpassed the previous year-high set at 3,133.74 in just a day. It was the first time the Kospi had closed above 3,180 since September 2021.

“While the US President Donald Trump continues to exert pressure through tariffs, the market placed more weight on the possibility of a trade deal,” according to Kim Ji-won, an analyst at KB Securities, said.

“The Korean government’s policy momentum continues. Expectations for a boost in undervalued stocks have been steadily growing, as measures such as mandatory treasury share cancellations and separate taxation on dividend income are being pushed forward faster than anticipated, aimed at enhancing shareholder value,” Kim said.

On Track for Rate Cut

Meanwhile, the expectation for eased monetary policy also fuelled the stock market. Though the Bank of Korea held its base rate steady at 2.5% Thursday, the market viewed the central bank remains on track for a rate cut.

Shortly after the rate-setting meeting, Bank of Korea’s Governor Rhree Chang-yong told reporters that the rate freeze was necessary to temper excessive expectations for a rate cut. The rate freeze was executed to rein in mounting household debt amid a resurgent property market.

“Housing prices, especially in the Seoul metropolitan area, are rising faster than they did in August last year. The policy priority lies in stabilising market expectations and managing household loans to prevent a rise in housing prices,” Rhee said.

According to the news report, Rhee further explained that four out of six members of the Monetary Policy Board, excluding himself, left the door open for a possible rate cut within the next three months, while the other two took a more cautious stance. Rhee’s own suggestion was not disclosed.

Since October, the bank has been alternating between rate cuts and holds, bringing down the policy rate by a cumulative 1 percentage point to support the sluggish economy.

“Rhee explained that while financial stability must be prioritised, at the same time, stimulus policies remain necessary due to the low-growth environment,” Ahn Ye-ha, an analyst at Kiwoom Securities, said.

“While the rate cut could be delayed until October as the BOK assesses the impact of the real estate policies, the possibility of a rate cut in August remains high, provided the low-growth trend does not change significantly,” Ahn added.