WHAT IS 'Korean Composite Stock Price Indexes - KOSPI'

Korean Composite Stock Price Indexes (KOSPI) refers to a series of indexes that track the overall Korean Stock Exchange and its components. Each of the KOSPI indexes are capitalization-weighted market averages.  

The best-known of these indexes is the KOSPI 200, which comprises the 200 largest publicly-traded common stocks traded in Korea, tracking roughly 70% of the market value of the overall Korean Stock Exchange. The KOSPI 200 is used as a rough benchmark when investors or traders refer to the performance of the Korean Exchange. For this reason, and because its components are large-cap stocks, people compare the KOSPI 200 to the S&P 500 in the United States.

As of 2018, major KOSPI 200 components included consumer product maker Samsung Electronics, Hyundai Motor, semiconductor manufacturer SK Hynix, utility provider Korea Electric Power and Shinhan Bank.

BREAKING DOWN 'Korean Composite Stock Price Indexes - KOSPI'

Korean Composite Stock Price Indexes (KOSPI) first debuted in the early 1980s, with several variants rolled out in subsequent years, including the KOSPI 100, focused on mid-caps, and the KOSPI 50, representing small caps. The KOSPI also refers to a family of indices tracking specific industries including chemicals and banks, and the KODI index, which specializes in dividend stocks. Also, the KOSPI appears on several other products that track the prices of futures, options and sovereign bonds.

Note that while KOSPI refers to the entire family of indexes, many market participants call the KOSPI 200 simply the KOSPI.

History of the KOSPI 200

The KOSPI 200 began trading at the start of January in 1983 at a value of 122.52. Its base value, indexed to January 4, 1980, is 100. The KOSPI 200 rose more than 8-fold to a value of more than 1000 by April of 1989, roughly two years following the Asian financial crisis. The index value surged to 1997.06 by its 30th birthday at the end of 2012, trailing only the Hong Kong Stock Exchange and Taiwan Stock Exchange over the same time frame. The KOSPI 200 index stood at roughly 2,470 by mid-2018, up more than 20-fold since its introduction.

Notable dates for the KOSPI include June 17, 1988, when it gained about 8.5%, its largest one-day percentage gain. It also fell more than 12% on September 12, 2001, the day following the 9/11 terrorist attack in the U.S. The index closed above 2000 for the first time on July 24, 2007.

Analysts, market participants and the international financial news media all follow the KOSPI 200 to varying degrees. U.S.-based news outlets such as The Wall Street Journal and Bloomberg, as well as London-based Reuters, owned by Canada-based Thomson Reuters, often quote the index, and use its values when reporting on market events in Korea.

RELATED TERMS
  1. Composite

    A composite is a grouping of equities, indexes or other factors ...
  2. NYSE Composite Index

    The NYSE Composite Index serves as a gauge of the performance ...
  3. Nasdaq Composite Index

    The Nasdaq Composite index is a market-capitalization weighted ...
  4. Value Line Composite Index

    The Value Line Composite Index is a stock gauge containing approximately ...
  5. Index Futures

    Index futures are contracts based on a financial index, which ...
  6. North Korean Won (KPW)

    The North Korean won (KPW) is the national currency of North ...
Related Articles
  1. Investing

    A Guide To Key ETFs Investing In South Korea

    An overview of the ETFs that offer investors an easy and efficient way to invest in South Korea's many leading companies.
  2. Investing

    Emerging Markets: Analyzing South Korea's GDP

    South Korea's transition from a war-devastated poor country to an affluent developed nation presents a phenomenal growth story.
  3. Investing

    North Korean Sanctions Just Got Serious

    Seoul's decision to shut down the Kaesong Industrial Complex is a blow to the region's attempts at economic cooperation and peaceful coexistence.
  4. Investing

    Stock Exchanges: A Global Tour

    Check out the history and inner workings of the world's six most well-known stock exchanges.
  5. Tech

    Why Is Cryptocurrency Trading Popular In South Korea?

    South Korea has become a hub for cryptocurrency trading. Why are South Koreans enamored with cryptocurrency trading?
  6. Insights

    Economic Consequences of Korean Reunification

    Relaxing tensions between North and South Korea have people wondering what Korean unification would mean for the global economy.
  7. Investing

    The Hidden Flaws of Index Investing

    Index investing isn't always better than active investing. Here's why.
  8. Investing

    South Korea - King of Exports

    Read about one the most important and successful exporting countries in the world, and learn more about the types of products it exports.
  9. Tech

    Why Is South Korea So Important to Bitcoin Prices?

    South Korea is one of the largest markets for bitcoin traders worldwide, hence, its outsized impact on BTC prices.
  10. Investing

    Index Investing

    Get to know the most important market indices and the pros and cons of investing in them.
RELATED FAQS
  1. How can I find out if a company I like is included in an index?

    Learn how to find out what indexes include a company's stock. Determine the importance of predicting future price movement ... Read Answer >>
  2. What are the most common market indicators to follow the Chinese stock market and ...

    Learn the most commonly followed market and economic indicators used by market analysts to track the Chinese stock market ... Read Answer >>
  3. Why do investors use the S&P 500 as a benchmark?

    Learn about the advantages and disadvantages of using the S&P 500 as a benchmark for portfolio performance, and understand ... Read Answer >>
Trading Center