Intense Competition to Enter Top 10 Market Cap Among Changing Leading Stocks

Market Cap Rankings 9th to 12th Change Almost Daily Over Past 5 Days
Market Cap Rankings Shift with Leading Stocks Change
Low PBR Stocks Showing Pause, Secondary Battery Stocks Maintain Position

Recently, frequent changes in the top 10 market capitalization rankings on the Korea Composite Stock Price Index (KOSPI) have created a chaotic situation. Low price-to-book ratio (PBR) stocks surged into the top 10, but as they weakened due to recent profit-taking, secondary battery stocks, which had ceded their positions, appear to be making a comeback. As the leading stocks change, the market capitalization rankings are frequently shifting. Since the market cap gaps among these stocks are not large, this competitive phase is expected to continue for the time being.

According to the Korea Exchange on the 20th, the rankings from 9th to 12th in market capitalization all changed within a day. Samsung SDI overtook LG Chem to rise to 9th place, while LG Chem dropped one spot to 10th. The 11th and 12th places also swapped positions, with Naver (NAVER) rising to 11th and KB Financial Group falling to 12th.

Over the past five days, the stocks ranked 9th to 12th on the KOSPI have been changing almost daily. This frequent fluctuation in market cap rankings is due to the low PBR stocks that have been strong since last month. Driven by expectations for corporate value-up programs, low PBR stocks led the market rally last month and emerged as the leading stocks. KB Financial, which was ranked 13th at the end of last month, showed strong gains this month and rose to 9th place on the 14th. This marked KB Financial's first entry into the top 10 since December 2018, a span of five years and three months. However, KB Financial did not stay long in the top 10. From the 15th, as low PBR stocks weakened due to profit-taking, it fell to 11th on the 18th and then dropped another spot after yielding its position to Naver the following day.

Samsung C&T also captured the 10th spot on the 14th as its stock price rose on corporate value-up expectations, but after an activist fund's shareholder return proposal was rejected at the shareholders' meeting on the 15th, its stock price plunged sharply, pushing it out of the top 10. Naver, which was ranked 13th, filled the vacancy left by Samsung C&T.

The changes in leading stocks seem to have caused shifts in market cap rankings. Lee Woong-chan, a researcher at Hi Investment & Securities, said, "With the AI adjustment and the value-up policy momentum coming to an end, after the shareholders' meetings, holding companies like Samsung C&T started to undergo corrections, and bank stocks have risen significantly, lowering dividend yields." He added, "As the two major momentum drivers, AI and value-up, are exhausted, the market has begun to adjust, but the scale will not be large, and a change in leading sectors will occur." He further noted, "Since mid-March, secondary batteries, shipbuilding, and healthcare sectors have started to show new strength."

Since the market cap gaps among these stocks are not large, frequent ranking changes are expected to continue for the time being. The market cap gap between 9th-ranked Samsung SDI and 10th-ranked LG Chem is only 199.2 billion KRW. The gap between 11th-ranked Naver and 12th-ranked KB Financial is 401.2 billion KRW.

Moreover, although secondary battery stocks, which had been pushed out by low PBR stocks, have recently shown strength and succeeded in reclaiming their positions, uncertainties remain. Anna Lee, a researcher at Yuanta Securities, analyzed, "The secondary battery sector still faces high uncertainty due to the continued slowdown in global electric vehicle (EV) demand, the expansion of lithium iron phosphate (LFP) battery adoption by global original equipment manufacturers (OEMs), and expected poor first-quarter earnings from domestic cell and material companies."

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