Samsung Electronics (005930.KS) and SK hynix (000660.KS) have been setting record highs day after day, rapidly expanding the share of Samsung Group and SK Group in the total market capitalization of Korean listed companies. As the concentration in semiconductors deepens, concerns are growing that the Korean stock market has become overly dependent on the two groups.
According to the Korea Exchange on Monday, Samsung Group's market capitalization stood at 1,981.8 trillion won ($1.44 trillion) as of the previous trading day, up 1.64% from the prior session. Its share of the total Korean stock market capitalization reached 38.55%. SK Group's market capitalization also rose 2.75% from the previous session to 1,404 trillion won ($1.02 trillion), accounting for 27.31% of the overall market. Combined, the two groups represent 65.86% of total market capitalization, roughly two-thirds of the Korean stock market.
Samsung Group's market capitalization grew sharply as the share price of its key affiliate, Samsung Electronics, surged 14.41% in a single day, lifting its market cap from 1,359 trillion won to 1,555 trillion won.
In particular, Samsung Electronics surpassed $1 trillion in market capitalization on a dollar basis, becoming the second Asian company after Taiwan's TSMC to join the "Trillion-Dollar Club." Of Samsung Group's 18 listed companies, six including Samsung Securities and Samsung C&T advanced while 12 declined, but the group's total market cap grew significantly thanks to the surge in Samsung Electronics.
SK Group also saw its market cap expand as its key affiliates SK hynix and SK Square rose 10.64% and 9.89%, respectively.
By contrast, the gap with the third-ranked Hyundai Motor Group is overwhelming. Hyundai Motor (005380.KS) Group's market capitalization stood at 297.3 trillion won, only about one-seventh of Samsung Group's. Its share of total market capitalization was just 5.78%.
The fourth-ranked LG (003550.KS) Group had a market cap of 223.3 trillion won, or 4.34% of the total. HD Hyundai followed with 199.1 trillion won, Hanwha Group with 175.6 trillion won, and Doosan Group with 131.9 trillion won. From POSCO Group onward, market capitalization falls below 100 trillion won.
Driven by the surge in semiconductor heavyweights, the KOSPI closed Monday at 7,384.56, up 447.57 points, or 6.45%, from the previous session. It was an all-time closing high.
However, concerns are mounting that concentration in specific sectors and stocks is intensifying. With gains focused only on Samsung Group, SK Group, and a handful of other listed companies backed by strong earnings, the KOSPI that day saw only 200 advancing stocks compared with 679 decliners, more than three times as many.
Some analysts attribute the recurring inflow concentration into Samsung Electronics and SK hynix at the start of each month to institutional factors. Lee Kyung-min, a researcher at Daishin Securities, said, "Funds are legally prohibited from holding more than 10% of a single stock, but the three-month average market cap weight disclosed by the Korea Financial Investment Association at the beginning of each month serves as a kind of safe harbor that allows excess holdings up to that level. Because of this, inflows at the start of the month concentrate on Samsung Electronics and SK hynix, resulting in a repeated pattern of semiconductor-driven KOSPI surges."
He added, "After the early-month surge, the rally in semiconductors tends to ease during KOSPI fluctuations, with rotational trading often unfolding. Even if investors missed the chance to buy Samsung Electronics and SK hynix at the end or beginning of the month, rather than rushing in, a strategy of expanding positions during short-term corrections remains effective."
