The Korea Stock Exchange is a division of the much larger Korea Exchange that includes a stock exchange, futures market, and stock market. Prior to joining the Korea Exchange, the Korea Stock Exchange operated independently since its start in 1956. Some of the exchange's milestones include launching the Stock Index Futures Market in 1996 and the Stock Index Options Market in 1997, as well as the adoption of electronic trading in 1988, warrant trading in 2000, and equity options and exchange-traded funds (ETF) in 2002. Today, investors can trade various instruments on the exchange like stocks, bonds, ETFs, and real estate investment trusts (REIT).
Breaking Down Korea Stock Exchange (KSC) .KS
The Korea Stock Exchange was integrated into the Korea Exchange after a 2005 merger that brought together the Korea Stock Exchange, the KOSDAQ, and the Korea Futures Exchange. It is one of the largest exchanges found in Asia. As of 2018, the exchange had listed 2194 companies with a combined market capitalization of $1.9 trillion. Normal trading sessions look the same as other major stock markets around the world. Trading opens at 9:00 AM and closes at 3:30 in the afternoon. The market is open all days of the week except Saturday, Sunday and holidays determined well in advance.
The Korea Composite Stock Price Index (KOSPI) is a gauge of health for the stock market, like the S&P 500 is in the United States. It contains all common stocks traded in the stock market division of the Korea Exchange. KOSPI was introduced in 1983 with a base value of $100 and today the index trades around $2,500. It is calculated on market capitalization like other major indexes and boasts daily trading volume in excess of multiple hundreds of million shares. As of 2017, the biggest holdings in the index included tech giant Samsung, automotive maker Hyundai Motors, and chemical company LG Chem.
Several offshoots of the KOSPI track specific sectors, factor strategies, and market capitalizations. For example, the KOSPI 200 Index consists of 200 large companies in the stock market division.
Trading the Korea Stock Exchange
US investors seeking exposure to the Korean market can gain it through exchange-traded funds. The iShares MSCI South Korea Index listed under the ticker symbol EWY tracks the investment results of an index on the South Korean market. This targeted access to Korean stocks extends to large and mid-sized companies. Some of the greatest risks to the Korea Stock Exchange include geopolitical tensions with its neighbor to the north and potential setbacks in technology, financials or automakers – three of the largest sectors in Korea.