KOSPI is making a splash by breaking through 6,000 points, but a closer look shows a clear "index optical illusion," with certain leader stocks pulling the index higher. While semiconductor large caps and financial and holding company stocks benefiting from the value-up push are serving as the engine for the index, small and mid-caps on the main board and KOSDAQ are instead hitting new lows and getting left behind. That is why individual investors are complaining, "The index may be 6,000, but my account is still in the red."
On the 26th, according to the Korea Exchange (KRX), 448 stocks rose and 435 fell on the main board the previous day. Even though the KOSPI broke through the 6,000 level, the number of gainers and losers was roughly the same. That contrasts with the fact that 9 of the top 10 stocks by market cap (excluding Samsung Electronics preferred shares), except Hanwha Aerospace, all rose in unison and lifted the index.
The situation on KOSDAQ was more serious, with only 659 gainers while 1,014 stocks fell, showing a clear downtrend. Looking at all stocks across the main board and KOSDAQ combined, 57% declined.
The share of large caps in KOSPI's total market capitalization also grew. Samsung Electronics and SK hynix, which have led the market rally, rose 1.75% and 1.29%, respectively, hitting their highest levels in a year. As of the day, the market caps of Samsung Electronics and SK hynix were 1,211 trillion won and 726 trillion won, respectively, with their combined market cap accounting for 39% (1,937 trillion won) of the main board. Including preferred shares, the two stocks make up more than 40% (2,053 trillion won) of the main board's market cap.
The KOSDAQ index also showed signs of being left out. The KOSPI index rose 1.91% (123.69 points) at the close, but the KOSDAQ index rose only 0.06% (0.73 points).
Weakness in pharmaceuticals and biotech, which have a large weight on KOSDAQ, had a big impact. Alteogen and ABL Bio fell 1.47% and 1.37%, respectively. The KRX Healthcare Index and KRX 300 Healthcare Index, both composed of pharmaceutical and biotech stocks, fell 1.19% and 1.12%, respectively, marking the steepest declines among the 34 KRX indexes on the day.
Given the circumstances, complaints are mounting that "the KOSPI may be 6,000, but my account is still blue." An office worker, a person surnamed Park, 27, said, "Thinking diversification is important, I split my investments among five to six small and mid-caps, but only the stocks leading the index are rising, which is discouraging," adding, "Friends with a high weighting in Samsung Electronics or SK hynix are in a festive mood, but I feel like I'm the only one being left out."
There are also many cases where investors in top market-cap names are not feeling the warmth of the bull market. A college student, a person surnamed Kim, 25, said, "I invested in NAVER and Kakao, which I judged to be blue chips in their own right, but my stocks have actually fallen compared with last year," expressing dejection.
For the time being, the rally centered on semiconductor large caps appears likely to continue. Han Dong-hee, a researcher at SK Securities, said, "Re-rating has not even begun, and among global artificial intelligence (AI) names, Korea's memory is the cheapest," adding, "If depository receipts issuance becomes visible, SK hynix's undervaluation will stand out even more."
Noh Dong-gil, a researcher at Shinhan Investment & Securities, said, "In March, there is a high possibility of entering a seasonal gap where the pace of earnings upgrades centered on semiconductors briefly slows," but added, "If volatility appears in March, the first interpretation is PER normalization rather than a weakening of fundamentals, and as we head into the pre-earnings season in April (just before results), earnings momentum is likely to reemerge."
Lee Sang-ho, a research fellow at the Capital Market Research Institute, said, "Semiconductors still have room to rise from a valuation perspective, so the polarization trend is likely to continue for the time being," adding, "There may be attractive companies among small and mid-caps, but it is hard to see them as as attractive as large caps in terms of fundamentals or earnings."