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Photo courtesy of Yonhap News |
[Alpha Biz= Ellie Kim] South Korea’s benchmark equity market is seeing record levels of liquidity, but capital is increasingly concentrated in a handful of large-cap stocks, deepening market polarization.
According to the Korea Exchange on May 19, the KOSPI’s average daily trading value reached KRW 51.99 trillion so far this month—up roughly 76% from KRW 29.55 trillion in April and the highest monthly level on record. On May 12, daily turnover hit an all-time high of KRW 67.11 trillion.
Despite the surge in trading activity, most stocks remain relatively illiquid. Of the 948 listed companies, 73.3% (696 stocks) recorded average daily trading below KRW 10 billion, while 43.2% (410 stocks) traded less than KRW 1 billion per day.
This imbalance persists even as overall liquidity has surged, indicating that capital inflows are disproportionately concentrated in a small number of stocks.
In particular, Samsung Electronics and SK Hynix are dominating trading activity. Together, the two accounted for 42.4% of total KOSPI turnover this month, up sharply from 31.8% in April.
Market analysts expect the concentration trend to continue, driven by strong passive inflows through ETFs and pension funds, which tend to favor large-cap stocks. These flows are also helping support downside stability in the broader index despite rising volatility linked to macro factors such as interest rates, exchange rates, and geopolitical risks.
However, some warn that excessive concentration in the semiconductor sector could increase systemic risk. When volatility rises, highly concentrated portfolios may lose diversification benefits, potentially amplifying market swings and prompting mechanical rebalancing by institutional investors.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
