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The heat of the stock market is heating up. While the US stock market is hitting an all-time high, KOSPI has also gained momentum and is taking off its nickname “Boxpi”. Just as a country’s currency is a means of measuring sovereign wealth and demonstrating credibility, the significance of a rise in the stock market is encouraging as it can serve as a positive outlook for major Korean companies and a signal of growth in national power.
The index was up over 15% this month. With the exception of 1 of the last 5 trading days, all of them increased and, as a result, the week ended with a new point of 2633.45 on 27. In 1980, when the market capitalization reached 100, it increased by 26 times. There is also an optimistic outlook that it could cross the 3000 line in the future.
By looking at the market capitalization, the increase in wealth can be realized. KOSPI’s market cap was around 1476 trillion winners at the end of last year, up from 1700 trillion winners last week and 1808 trillion winners based on the previous day’s closing price. As of the 25th, KOSDAQ has registered 344 trillion 9842 billion won. In the case of the United States, the New York stock market, the number one stock market in the world, is about $ 21 trillion, and the Nasdaq, the second largest, is about $ 16 trillion. When these three indices are combined, the market capitalization is $ 37.48 trillion (about 4.15 trillion won), slightly above 179% of GDP. The last year that the US GDP exceeded the total market capitalization was in 2012. Last week, the combined market capitalization of KOSPI and KOSDAQ was around 2150 trillion won. This year it exceeds 120% of Korea’s gross domestic product (GDP) of $ 1,586.8 billion (approximately 1757.381 billion won) as projected by the International Monetary Fund (IMF).
The temperature of the stock market can also be felt by the trading volume of shares and the trading value of a year ago significantly increased. Average transaction volume on the 5th nearly tripled from 500 million shares at the end of last year to 1.3-1.4 billion shares last week. The deposit turnover rate (the percentage of the transaction amount divided by the deposit amount) also increased from 27.75% at the end of last year to 64.72% on 25. On 25, the transaction value is state of 21.795.8 billion won, and the KOSDAQ exceeded 3.98 trillion won, for a total of 18.995 billion won. Compared with KOSPI 4,113.6 billion won and KOSDAQ 3,799.4 billion won at the end of last year, it also tripled.
The theory that some of the transaction amounts come from household loans is strong. In Korea’s third quarter this year, labor income and business income from household income fell by 1% from a year ago, but household loans only increased 7% to 1.682 trillion. won in the same period. Considering this, an increase in the index is beneficial to the national economy. However, there is also profound concern on one side of the bull market. Warnings are also coming out about inflation and the resulting rate hike.
Looking at Wang Yang’s exchange rate war, there is a sentence in the Warring States period book “Gwanja” that says “If currency is heavy, all things are light, and if currency is light, all things are things are heavy “. The present situation is the second: if the value of money decreases, the value of the product increases. At the same time, many people believe in stocks as a currency.
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