The index rose 15 fold since its launch on Jan. 4, 1983, finishes 2012 at 1997.05, up from 122.5 at its launch
The Korea Exchange's KOSPI Index celebrated the 30th anniversary
launched on Jan. 4, 1983. The photo is a scene from a ceremony
for the launching of the derivative market at the stock exchange
early in January with a number of dignitaries including Chairman
Kim Seok-dong of the Financial Services Commission, and
Chairman Kim Bong-soo of KRX, among others.
The Korea Exchange’s KOSPI index celebrates 30 years since its launch on Jan. 4, 1983 as a barometer of the Korean stock market. Chairman Kim Bong-soo of KRX said the KOSPI index has correctly reflected not only the growth of the economy, but also transformation of the Korean industry in the past 30 years.
We at KRX will do our best to make contribution to further growth of the Korean economy, especially the financial industry like the Dow Jones index in the United States with a century long history, the KRX chairman said.
The KOSPI index has followed the growth of the national economy ever since as the main stock market index as well as an economic index, growing 15 fold over the last three decades, while profits from shares have expanded 28 times, much higher than other business areas.
The Korea Exchange said the KOSPI index started at a level of 122.52 at the beginning of 1983 and has expanded to l1,997.06 as of the end of 2012, up 1,530 percent, the third highest rise in the world after Hong Kong (2,858 percent) and Taiwan (1,637 percent).
Total market value of the listed companies grew to 1,154.3 trillion won, up 394 fold (the rate increase between the index and market value due to the newly listed firms’ market value not calculated in the index).
The daily share transaction value amounted to 4.8232 trillion won on average, up 722 times, and the number of stock investors expanded from 1.7 percent to 10.6 percent of the population of Korea, or 4.6 million, and the number of listed companies grew 1.3 times.
GDP expanded from $77.5 billion in 1983 to $1.1636 trillion as of the end of 2012, up 1,401.3 percent according to IMF calculations.
The profits from the stock market based on the index from 1983 expanded 27.9 times as of the end of 2012. One million won invested in the stock market in 1983 would have grown to 28.93 million won at the end of 2012.
Official figures showed that bond issuance value grew by 16.1 percent, deposits at securities firms related to stock investments expanded 7.8 times, the price of real estate based on the selling price of apartments in the Gangnam Ward in Seoul and gold prices have risen 420 percent, while the price of crude oil expanded 2.9 times.
The profits from gold transactions topped all other commodities with a 3.3-fold growth in the past 10 years.
The most profitable shares changed from banks to electronics and autos. By company, Samsung Electronics and other electronics companies’ shares rose 85 fold in the past 30 years. Share prices of steel rose 48 times, chemicals 34 fold, and foods 34 fold, leading share price rises during the period.
As of the end of 2012, the market value of Samsung Electronics increased to 243.637 trillion won in 2012 from 63.7 billion won in 1983, up 2,825 fold, followed by the market value of Hyundai Motor at 52.849 trillion won, up 613 times. The market value of the top 10 listed firms rose from 27 percent of total market value of the listed firms to 41 percent.
The lowest growth was marked by construction company shares rising only 6.6 percent during the period, followed by those of textile, clothing, paper, and timber, and financial firms, which fell during the financial crises.
It has not been fair weather for the KOSPI index in the past three decades of its growth. It had many ups and downs including such devastating events as the Sept. 11, 2001 terrorist attack on the World Trade Center in New York and the 2000 Black Friday crash causing the index to skydive following a huge fall on the New York Stock Exchange.
Stock prices rose sharply during the foreign exchange crisis. Share prices also rebounded quickly the day after the 9-11 attack in New York. The highest one-day rise for the KOSPI index occurred the day following the signing of the currency swap agreement between the United States and Korea on Oct. 30, 2008, when the index rose 11.95 percent. During the year following the foreign exchange crisis of 1987, stock prices rebounded 8.5 percent, or 23.81 points, the second highest daily rise for the index due to high expectations for corporate structuring.