As the KOSPI index recovers to 6,000 points and shows strength, the domestic market's "semiconductor concentration" is deepening. The semiconductor sector, including the two stocks Samsung Electronics and SK hynix, is leading the market's gains.
In particular, "debt-fueled investing" is rapidly increasing around semiconductor stocks, prompting calls for caution.
According to the Korea Exchange (KRX) on the 17th, the semiconductor weight within the KOSPI index is overwhelmingly high. As of the 15th, the combined market cap of Samsung Electronics and SK hynix was 2,043.1945 trillion won, surpassing 40% of the total market cap of the main board (4,995.5123 trillion won). Even in the KOSPI rebound phase, the structure in which the two stocks dictate the index's direction is becoming more pronounced.
This trend is analyzed as stemming from expectations for a semiconductor supercycle (boom cycle) and an outlook for improved earnings. In the securities industry, there is an expectation that both Samsung Electronics and SK hynix will post all-time high operating profits this year.
Experts pointed out that the current market relies excessively on large-cap semiconductor stocks. Lee Jeong-hwan, a professor in the Department of Economics and Finance at Hanyang University, noted, "Right now, the KOSPI index would struggle to top 5,000 without Samsung Electronics and Hynix, showing a severe concentration." Lee said, "If the semiconductor sector undergoes a correction, forced selling could hit all at once, exerting greater downward pressure on the index than in a typical market."
According to the Capital Market Research Institute, based on the previous day's KOSPI at 6,226.05 points, the KOSPI index estimated excluding Samsung Electronics and SK hynix was 4,752 points, failing to top the 5,000 level. This is the result of calculating the rise in the total market cap of the KOSPI excluding the combined market cap of Samsung Electronics and SK hynix.
Goldman Sachs, the world's largest investment bank (IB), analyzed in late February that the KOSPI index excluding Samsung Electronics and SK hynix was only around 4,700. At the time, the KOSPI was moving in a similar 5,800–6,200 range. As of Feb. 27, Samsung Electronics was 216,500 won, similar to that day's close of 217,500 won, but SK hynix was 1,061,000 won then, 94,000 won (about 8.8%) lower than that day's close of 1,155,000 won.
As these stocks lead gains in the domestic market, debt-fueled investing is also concentrating in semiconductor names. As of the 15th, margin loan balances for Samsung Electronics stood at 3.4058 trillion won, up 47% from Feb. 27 (2.3065 trillion won), before the Middle East war. Compared with the end of last year (1.6468 trillion won), the jump is 107%.
SK hynix likewise increased about 30% over the same period, from 1.7358 trillion won to 2.248 trillion won.
As semiconductor concentration intensifies and debt-fueled investing focuses on these stocks, there are worries that if market volatility widens, investment losses could grow. Even if the index rises, gaps between stocks are widening, and shifts in the semiconductor cycle could shake the entire market significantly.
Kim Jeong-sik, an emeritus professor in the Department of Economics at Yonsei University, said, "A market skewed toward a specific sector as it is now is not healthy," adding, "For the KOSPI to climb beyond 6,000 to 7,000 and 8,000, the upward trend needs to spread across diverse industries."