Kospi wraps up best year on strong earnings, retail demand

Companies also raised record levels of capital through fresh stock flotations on the exchange.

Choi Si-young

Choi Si-young

The Korea Herald


An electronic board showing the Korea Composite Stock Price Index (KOSPI) at a dealing room of the Hana Bank headquarters in Seoul on Thursday. (Yonhap)

December 31, 2021

Upbeat corporate earnings and robust retail demand set the key benchmark Kospi and junior Kosdaq on track for their best year since trading began on the exchange decades ago.

The stock market, which will open Monday after a three-day break, saw the Kospi hitting a record high of 3,305 points on July 6, while the Kosdaq soared to trading around 1,000 points, a first in 20 years. Kospi closed at 2977.65 points on its final trading session in 2021, while Kosdaq ended at 1033.98 points.

Kospi-listed companies reported 1,651 trillion won ($1.3 trillion) in total revenues, 143 trillion won in operating profits and 128 trillion won in net profits as of the third quarter this year, all record highs respectively.

Kosdaq-listed companies also set new records, reporting 157 trillion won in total revenues, 12 trillion won in operating profits and 11 trillion won in net profits in the same period.

“Strong exports accompanied by monetary easing globally played a key role in the new highs,” the bourse operator Korea Exchange said.

Companies also raised record levels of capital through fresh stock flotations on the exchange, with the Kospi attracting 17 trillion won through initial public offerings this year, and the Kosdaq bringing in 3 trillion won.

The record-high IPOs — including game developer Krafton and digital lender KakaoBank, who raised 4 trillion won and 2 trillion won, respectively — topped the previous record IPOs of the year in 2010, when 10 trillion won was raised.

Meanwhile, retail investors, who scooped up stocks at a record pace amid the steepest rally this year, expanded offshore trading, buying shares worth $390 billion in total as of last week, which marks a 97 percent jump on-year.

Investment in digital businesses like metaverse and nonfungible tokens grew rapidly. Kosdaq-listed gamemaker Wemade, valued at 646 billion won last year, saw its market cap jump to nearly 5 trillion won this year after it published games using NFTs — a type of digital asset authenticated by the blockchain.

The Korea Exchange said it would cultivate a climate hospitable to sustainable market growth.

The KRX recently rolled out revised rules to attract unicorns — private companies valued at least $1 billion or more — and plans to make listed firms to post their progress on the environmental, social and governance investment.

In March, Seoul-based e-commerce giant Coupang Inc. debuted on New York Stock Exchange, prompting concerns over listing barriers some describe as hampering blockbuster IPOs. Coupang’s market value stands at 60 trillion won.

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