What Are the Korean Composite Stock Price Indexes?
Let me explain the Korean Composite Stock Price Indexes, or KOSPI, directly to you. These are a series of indexes that track the overall Korean Stock Exchange and its components. Each KOSPI index is a capitalization-weighted market average.
The one you probably hear about most is the KOSPI 200, which includes the 200 largest publicly-traded common stocks in Korea. It covers roughly 70% of the market value of the entire Korean Stock Exchange. When investors or traders talk about the performance of the Korean Exchange, they're usually referring to the KOSPI 200 as a benchmark. Because it focuses on large-cap stocks, people often compare it to the S&P 500 in the United States.
As of 2021, key components in the KOSPI 200 include Samsung Electronics, a major consumer product maker, Hyundai Motor, semiconductor manufacturer SK Hynix, utility provider Korea Electric Power, and Shinhan Bank.
Understanding the Korean Composite Stock Price Indexes
I want you to understand that the KOSPI family first appeared in the early 1980s, with various versions introduced over the years. These include the KOSPI 100, which targets mid-cap stocks, and the KOSPI 50, which covers small caps. The KOSPI also includes indices for specific industries like chemicals and banks, plus the KODI index focused on dividend stocks.
Additionally, the KOSPI is tied to other products that track futures, options, and sovereign bonds. Keep in mind that while KOSPI technically refers to the whole family, many in the market just call the KOSPI 200 by the name KOSPI.
History of the KOSPI 200
The KOSPI 200 started trading in January 1983 at a value of 122.52, with its base value set at 100 from January 4, 1980. By April 1989, about two years after the Asian financial crisis, it had risen more than eightfold to over 1,000. It reached 1,997.06 by the end of 2012, its 30th anniversary, outperformed only by the Hong Kong and Taiwan stock exchanges in that period. By mid-2018, the index was at roughly 2,470, up more than 20 times since its launch.
Notable Dates and Media Coverage
You should note some key dates for the KOSPI. On June 17, 1988, it gained about 8.5%, its largest one-day percentage increase. It dropped more than 12% on September 12, 2001, the day after the 9/11 attacks in the U.S. The index first closed above 2,000 on July 24, 2007.
Analysts, market participants, and international financial media follow the KOSPI 200 to different extents. Outlets like The Wall Street Journal, Bloomberg, and Reuters often quote it when reporting on Korean market events.
