Last Year KOSPI 200 PER 24.1 Times... Undervalued Compared to Developed Countries

Exchange Announces Comparison Results of Investment Indicators Between Domestic KOSPI Market and Major Overseas Markets

[Asia Economy Reporter Gong Byung-sun] Last year, the price-to-earnings ratio (PER) of the KOSPI 200 was found to be lower than the average of developed countries. The dividend yield was higher than that of both developed and emerging markets.

On the 4th, the Korea Exchange announced the results of a comparison of investment indicators between the domestic stock market and major overseas markets, reflecting the financial statements for last year.

The PER and price-to-book ratio (PBR) of the KOSPI 200 were 24.1 times and 1.3 times, respectively. These figures are lower compared to the developed countries' PER of 30.4 times and PBR of 3.1 times. A lower PER indicates that the stock price is undervalued.

The dividend yield of the KOSPI 200 was higher than that of developed and emerging markets. The domestic market's dividend yield was 2.0%, surpassing that of developed countries (1.7%) and emerging countries (1.9%).

The overall PER of the KOSPI market recorded 26 times last year, exceeding the previous year's PER of 18.7 times. The Exchange explained that the PER rose because the increase in market capitalization was greater than the increase in earnings. In fact, earnings grew by about 19%, from 67 trillion won in 2019 to 80 trillion won last year. Market capitalization increased by about 67%, from 1,247 trillion won as of May 18 last year to 2,084 trillion won as of May 3 this year.

The overall PBR of the KOSPI market also exceeded that of 2019, recording 1.3 times. Although total equity increased, market capitalization grew even more. Total equity rose by about 5%, from 1,573 trillion won at the end of 2019 to 1,651 trillion won at the end of last year.

Last year's dividend yield decreased compared to the previous year. The dividend yield, which was 2.2% in 2019, dropped to 1.8% last year. The Exchange explained, "Although dividends increased last year, the effect was offset by the increase in market capitalization." The total market capitalization of the KOSPI market last year was 38 trillion won, an increase of about 36% compared to the previous year.

This content was produced with the assistance of AI translation services.