The Korea Herald


‘Kospi’s rally solely led by Samsung'

By Korea Herald

Published : May 30, 2017 - 15:23

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A significant surge by the nation’s major market index was entirely driven by Samsung Electronics, and without the tech giant’s contribution, the benchmark index could have fallen, a study showed Tuesday.

According to the report by Korea Capital Market Institute, a private research center on the nation’s stock market, the Korea Composite Stock Price Index saw an increase of 211 points over a year solely led by Samsung Electronics’ stock price growth, which added 231 points.
(Yonhap) (Yonhap)

“The Kospi’s surge was entirely led by Samsung Electronics,” said Kim Joon-seok, a researcher who led the study. “Without Samsung Electronics’ contribution, Kospi could have lost 20 points.”

When analyzing the Kospi’s growth for the last six month, Samsung’s leverage in the stock market growth was slightly lower, but it remained as dominant as it was before. Kospi rose 197 points in the past six months, with 138 points contributed by Samsung Electronics, the report added.

Meanwhile, small-cap stocks -- referring to shares by companies with a market cap of under 35 billion won ($31.1 million) -- outperformed large- and mid-cap stocks, in terms of cumulative price-to-earnings ratio, the report said.

Over a year from May last year, the price-to-earnings ratio of small-cap shares gained 0.5 percent on average, while those of mid- and big-cap shares dropped 13.7 percent and 7.7 percent, respectively. A mid cap refers to a company that has a market cap between 35 billion and 75 billion won, while a large-cap firm has 75 billion won and greater.

Despite the loss of price-to-earnings ratio by larger firms, the Kospi was able to hit a record high because of the way it was calculated, Kim said. The index market capitalization is weighted, meaning that a few companies with the largest value have more influence on the Kospi’s returns, even if a majority of companies suffer a decline in their share prices.

By Cho Chung-un (