The Korean Stock Market at a Glance

The Korean stock market is divided largely into two markets. One is KOSPI, the other is KOSDAQ. The place that operates both is the Korea Exchange (KRX), created in 2005 when the former stock exchange, futures exchange, and KOSDAQ were merged into one.

KOSPI is the 'main market,' where large, blue-chip companies like Samsung Electronics and SK Hynix are mainly listed. The KOSPI index uses January 4, 1980 as its base (100) and has been published since 1983.

KOSDAQ is a market created in 1996 by benchmarking the U.S. Nasdaq, where venture, small- and mid-sized, and growth companies are mainly listed.

KOSPI and KOSDAQ differ quite a bit in size.

As of the end of 2024, KOSPI's market capitalization was on the order of 1,900 trillion won (around $1.3 trillion), with roughly 950 listed companies. KOSDAQ has about 1,700 listed companies — actually more companies than KOSPI — but its market cap is about 340 trillion won, less than one-fifth of KOSPI's.

In other words, KOSDAQ is 'a market where many small companies gather,' and KOSPI is 'a market where a few large companies account for most of it.'

Viewed globally, the Korean market is upper-middle in size. However, as we saw earlier, since the U.S. accounts for about half of world market cap, Korea's share is not large — in the low single-digit percentages.

It helps to know two clear characteristics of the Korean market. First, the weight of semiconductor and export conglomerates is large, so it's sensitive to the global economy and the semiconductor cycle. Second, the share of foreign investors is high, so it's heavily influenced by exchange rates and global capital flows.

One more thing: each index-classification body views Korea differently. MSCI still classifies Korea as an 'emerging market,' while FTSE classifies it as a 'developed market.' It's the same country, but the classifications diverge because the standards differ (we'll cover this more in a later article).