Stock market has shed W260tr amid mounting political, economic woes
South Korea's stock market shed nearly 260 trillion won ($176.15 billion) in market capitalization this year, with Samsung Electronics accounting for 60 percent of the decline, according to Korea Exchange data.
The benchmark Kospi’s market cap stood at 1,966.96 trillion won as of Friday’s close, while the secondary Kosdaq was valued at 333.87 trillion won. Compared to the end of 2023, the Kospi lost 159.41 trillion won, while Kosdaq fell by 97.92 trillion won, translating to a combined on-year contraction of 257.33 trillion won, or 10 percent.
The Kospi declined by 9.43 percent to 2,404.77 points, down from 2,655.28 at the end of last year. Tech-heavy Kosdaq fared worse, plunging 23.15 percent from 866.57 points to 665.97.
Samsung Electronics was a major contributor to the market slump, with its market capitalization shrinking by 148.05 trillion won. The company’s valuation on the Kospi had fallen 31.6 percent to 320.58 trillion won as of Friday, down from 468.63 trillion won at the close of 2023. Its share of the Kospi's total market cap also declined sharply, from 22 percent to 16.3 percent over the same period.
South Korea’s stock market losses this year stand in stark contrast to gains in major global markets.
In the US, the S&P 500 rose 26.58 percent, while the tech-heavy Nasdaq surged 33.37 percent. Japan’s Nikkei 225 advanced 20.37 percent, with China’s Shanghai Composite and Hong Kong’s Hang Seng climbing 14.26 percent and 17.82 percent, respectively.
South Korea ranked as the worst-performing among 11 major Asian markets in 2024, according to a recent CNBC analysis. The Kospi had dropped 8.03 percent as of Dec. 23, trailing all others, including Malaysia's Jakarta Composite, the only other market to finish the year in the red, with a 2.47 percent decline. Taiwan’s major bourse Taiex led the region's gains, surging 28.85 percent over the same period.
Bloomberg data painted an even starker picture, with the Kosdaq performing the worst among 87 stock markets in the Asia-Pacific region, while the Kospi ranked 76th.
South Korea’s market faces a bleaker outlook for next year, with economic challenges expected to intensify. The Bank of Korea forecasts record-low growth of under 2 percent next year, amid worsening export growth and struggling domestic demand. The stumbling Korean won, which recently hit a 15-year low against the US dollar, is anticipated to depreciate further.
