How Did Listed Firms' Market Cap Surge in Q2 Amid Stock Rally in S. Korea?
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Synopsis
Discover how the market valuation of South Korean firms has surged in Q2, reflecting a strong stock market rally. The recent trends indicate a significant recovery in investor sentiment, particularly following a change in presidential leadership. With many companies reporting gains, this analysis sheds light on the current landscape of the South Korean economy.
Key Takeaways
- Market capitalization surged by 22.9% in Q2.
- Over 74% of companies experienced an increase in market cap.
- SK hynix Inc. had the largest market cap gain.
- The number of firms exceeding 1 trillion won increased.
- The stock market rally followed a significant political transition.
Seoul, July 7 (NationPress) The total market capitalization of publicly traded companies in South Korea saw a significant increase in the second quarter compared to the previous three months, fueled by a robust rally in the nation’s stock market, according to a corporate tracker released on Monday.
As of the end of June, the market cap of 2,758 companies listed on the main and secondary exchanges reached a combined 2,856 trillion won (approximately US$2.09 trillion), marking a 22.9 percent rise, or 532 trillion won, from the previous quarter, as reported by the Korea CXO Institute, according to Yonhap news agency.
Out of these, 2,066 firms, which accounts for 74.9 percent, experienced an increase in their market cap during the mentioned period, while 599 companies, or 21.7 percent, saw declines. The remaining 93 firms, or 3.4 percent, either maintained their valuation or were newly listed.
In contrast, in the first quarter, over 60 percent of listed firms had reported a decrease in their market capitalization.
The number of companies with a market valuation exceeding 1 trillion won rose to 284 by the end of June, an increase of 42 firms from three months earlier. Additionally, those with a valuation surpassing 10 trillion won grew to 55 from 43 during the same timeframe.
Among individual companies, SK hynix Inc. posted the largest gain, with its market value soaring by 73.7 trillion won, from 138.8 trillion won to 212.5 trillion won.
Following closely were major power plant builder Doosan Enerbility Co., with an increase of 28.8 trillion won, HD Hyundai Heavy Industries Co. with 13.3 trillion won, and both Samsung Electronics Co. and SK Square Co. at 11.8 trillion won.
Conversely, battery manufacturer LG Energy Solution experienced a downturn of 8.8 trillion won, alongside declines for Meritz Financial Group Inc., LG Chem, POSCO Holdings, and Samsung Biologics Co..
The South Korean stock market has been undergoing a remarkable rally for approximately a month since the inauguration of new President Lee Jae Myung on June 3, following the impeachment and removal of former President Yoon Suk Yeol due to insurrection charges.
On June 20, the benchmark Korea Composite Stock Price Index (KOSPI) surpassed the 3,000-point mark for the first time in over three years, propelled by investor optimism regarding policies under the new administration.
Point of View
It is crucial to highlight the resilience of the South Korean market in the face of political changes. The significant rise in market capitalization reflects not only investor confidence but also the potential for economic recovery under new leadership. This trend warrants close monitoring as it could signal broader implications for regional and global markets.
NationPress
03/09/2025
Frequently Asked Questions
What drove the market cap increase in Q2?
The increase in market capitalization was primarily driven by a rally in South Korea's stock market following the inauguration of the new president, which boosted investor confidence.
How many companies saw an increase in their market cap?
In the second quarter, 2,066 companies, or 74.9% of those listed, experienced an increase in their market capitalization.
Which company had the largest market cap gain?
SK hynix Inc. recorded the largest gain, with its market value increasing by 73.7 trillion won.
What was the overall market cap at the end of June?
The combined market capitalization of listed firms reached 2,856 trillion won (approximately US$2.09 trillion) at the end of June.
How has the political landscape affected the stock market?
The stock market has been positively influenced by the new administration's policies, contributing to the recent surge in market valuations.
