KOSPI Down 18% in First Half of Year... Large-Cap Stocks Hit Hard

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[Asia Economy Reporter Lee Myunghwan] In the first half of this year, the KOSPI saw a significant decrease in market capitalization, mainly among large-cap stocks. However, securities firms advised increasing the proportion of large-cap stocks, citing a gradual recovery in foreign investor demand.

On the 10th, Asia Economy analyzed the changes in market capitalization of the KOSPI market between January 3, the first trading day of the year, and July 4. The KOSPI market capitalization, which was 2,211 trillion won on January 3, decreased to 1,811 trillion won on July 4. This means the KOSPI market cap fell by 18.12% over the first half of the year.

Among KOSPI stocks, the decline rate was higher for the top market capitalization stocks. The market capitalization of the top 10 stocks, which account for more than 40% of the KOSPI market cap, dropped from 961 trillion won to 767 trillion won during the same period, a decrease of 20.25%. Even when expanded to the top 20 stocks, the market cap decline rate reached 19.37%.

The market cap share of Samsung Electronics, ranked first in market capitalization, noticeably decreased over six months. Samsung Electronics' share of the KOSPI market cap, which was 21.22% on January 3, fell to 18.83% on July 4. During this period, Samsung Electronics' market cap decreased by 27.35%. The market cap shares of other large tech stocks such as SK Hynix (4.23% → 3.58%) and Samsung SDI (2.02% → 1.92%) also declined. The market cap shares of the two major portal stocks, Kakao (2.31% → 1.67%) and Naver (2.79% → 2.13%), also showed a marked decrease.

Nevertheless, securities firms recommended expanding the proportion of large-cap stocks, citing a recovery in foreign investors' sentiment centered on large-cap stocks. Kim Seunghyun, head of the research center at Yuanta Securities, said, "Although foreigners have net sold a staggering 70 trillion won since February 2020, considering the reduced burden, foreign investors' reactions to exchange rate changes could be stronger than before," adding, "If foreigners return, the second half of the year will favor large-cap stocks in terms of size." Lee Kyungmin, a researcher at Daishin Securities, also analyzed, "Foreign investors have increased their shareholding mainly in large-cap stocks since May," and added, "Given the sharp decline amid external uncertainties, it can be seen as an expectation for a stronger relative rebound momentum of large-cap stocks when investment sentiment stabilizes."

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