Kospi rises 5th-fastest among major indices of G-20

South Korea’s main bourse index Kospi rose the fifth-fastest among the major indices of Group of 20 economies this year, data compiled by Korea Exchange showed Sunday.

The Kospi soared 17.1 percent this year from 2,026.46 to 2,372.57 as of Sept. 27, following those of Argentina, Turkey, Brazil and Italy. Argentina’s Merval Index topped the list by jumping 49.4 percent over the cited period.

This came in sync with the rallies in the G-20 countries. Nine of them saw their major indices surge over 10 percent. Russia was the only country among the G-20 whose major index fell from the end of 2016. Russian Trading System Cash Index fell 2.2 percent until Sept. 27.

The Kospi surged 21 percent as of July 24 by closing at 2,451.53, riding a record rally backed by a global boom in tech stocks and expectations that the liberal Moon Jae-in administration would address local corporations’ governance structures.

Tech giants such as themaker of Galaxy smartphones Samsung Electronics and chipmaker SK hynix are the biggest beneficiaries of the trend. Samsung Electronics shot up 43.4 percent over the cited period, and SK hynix skyrocketed 84.3 percent.

Despite the rally, the Kospi appears to have been relatively undervalued, another set of data showed.

The Kospi’s price-earnings ratio estimated by Morgan Stanley Capital International was the third-lowest among the indices of the G-20 following that of Russia and Turkey. As of Sept. 27, the Kospi stocks’ MSCI P/E ratio, given by dividing the share price by the average earnings per share, stood at 11.8, while that of Merval Index came to 126.14. The lower the ratio is, the more room there is for stock price growth.

Korean markets are set to reopen on Tuesday, after a 10-day closure for national holidays.

By Son Ji-hyoung 
(consnow@heraldcorp.com)