KOSPI (Korea Composite Stock Price Index)

Definition

The KOSPI is the benchmark stock market index of South Korea. * It tracks the performance of all common shares listed on the KOSPI Market (main board) of the Korea Exchange (KRX). * It is the Korean equivalent of the S&P 500 in the US or the Nikkei 225 in Japan.

Methodology

It uses a Market Capitalization-Weighted methodology. * Base Date: January 4, 1980. * Base Value: 100 points. * If the index is at 2,500, it means the total market value has grown 25 times since 1980.

The "Samsung Effect"

The index is heavily skewed by a single giant: Samsung Electronics. * Samsung Electronics alone accounts for roughly 20% of the entire index's market cap. * This makes the KOSPI highly sensitive to the semiconductor cycle. For global investors, buying the KOSPI is often seen as a proxy bet on Samsung and the global tech supply chain.

Characteristics: Cyclical & Export-Driven

• Since the Korean economy relies heavily on exports (Semiconductors, Autos, Shipbuilding, Batteries), the KOSPI is extremely sensitive to the global economic outlook.
• It is considered a leading indicator for the global economy ("The Canary in the Coal Mine"). When the global economy slows down, KOSPI is often hit first.