The KOSPI, or Korea Composite Stock Price Index is the primary
index used to measure the 788 listed stocks on the
, or KRX of South Korea.
[caption id="attachment_64619" align="alignright" width="300"
caption="Namdaemun market, Seoul, South Korea"]
The KOSPI is calculated in reference to the total market
capitalization of all listed companies on January 4, 1980, while
making adjustments for newly listed companies. The KRX also
publishes a variety of sub-indices based on market capitalization
The KRX has a market capitalization of $995 billion (15th in the
world) and a trading volume of over $1.5 trillion a year, making it
one of the largest emerging market exchanges.
World Federation of Exchanges report
also found that the KRX is the largest exchange in the world, in
terms of the number of stock index options and equity derivatives
South Korea is currently the 12th largest economy in the world
with a purchasing power (PPP) gross domestic product of more than
$1.5 trillion, or $31,700 per capita. The wealth level, liquid
markets, and globally recognized brands like Samsung, Hyundai, LG,
and Kia have fueled some debate about whether South Korea should
still be classified as an emerging market or whether it can
'graduate' to developed status.
However, the KOSPI index is still more correlated to other
emerging markets (represented here by the MSCI Emerging Markets
Index) than to developed-world benchmarks like the Standard &
Poor's 500). That could be in part because giant Korean stocks like
) and Hyundai are among the largest components of the MSCI
benchmark. This correlation, plus the higher volatility of the
KOSPI when compared to developed market indices like the S&P
500, have led to South Korea remaining among emerging markets for