The Korea Composite Stock Price Index or KOSPI is the index of all common stocks traded on the Stock Market Division—previously, Korea Stock Exchange—of the Korea Exchange. It is the representative stock market index of South Korea, like the S&P 500 in the United States. KOSPI was introduced in 1983 with the base value of 100 as of 4 January 1980. It is calculated based on market capitalization. As of 2007, KOSPI's daily volume is hundreds of millions of shares or.
History
KOSPI was introduced in 1983, replacing Dow-style KCSPI. For years, KOSPI moved below 1,000, peaking above 1,000 in April 1989, November 1994, and January 2000. On 17 June 1998, KOSPI recorded its largest one-day percentage gain of 8.50%, recovering from the bottom of the Asian financial crisis. On 12 September 2001, KOSPI had its largest one-day percentage drop of 12.02% just after 9/11. On 28 February 2005, KOSPI closed at 1,011.36, plunging to 902.88 in April. However, unlike previous bull traps, it kept moving upward, breaking the long-standing 1,000-point resistance level. In November 2005, the index's Korean name was officially changed to Koseupi jisu. On 24 July 2007, KOSPI broke 2,000 level for the first time. On July 25 it closed at 2,004.22. On 20 August 2007, the index recovered 93.20, its largest one-day point gain, after the U.S. Federal Reserve lowered the discount rate. On October 16, 2008, the index dropped 126.50, after the Dow Jones Industrial Average dropped 7.87%.
Record values
Starting with 24 February 2020, the index has been dropping continuously during the Coronavirus pandemic. As of 15 March, the KOSPI closed at 1,771.44, prompting the Financial Supervisory Commission to impose a six-month ban on short-selling, the first such drastic action in nearly nine years.
Annual Returns
The following table shows the annual development of the KOSPI since 1981.
Year
Closing level
Change in index in points
Change in index in %
1981
131.30
1982
128.99
−2.31
−1.76
1983
121.21
−6.03
−7.78
1984
142.46
21.25
17.53
1985
163.37
20.91
14.68
1986
272.61
109.24
66.87
1987
525.11
252.50
92.62
1988
907.20
382.09
72.76
1989
909.72
2.52
0.28
1990
696.11
−213.61
−23.48
1991
610.92
−85.19
−12.24
1992
678.44
67.52
11.05
1993
866.18
187.74
27.67
1994
1027.37
161.19
18.61
1995
882.94
−144.43
−14.06
1996
651.22
−231.72
−26.24
1997
376.31
−274.91
−42.21
1998
562.46
187.31
49.93
1999
1,028.07
465.61
82.78
2000
504.62
−523.45
−50.92
2001
693.70
189.08
37.47
2002
627.55
−66.15
−9.54
2003
810.71
183.16
29.19
2004
895.92
85.21
10.51
2005
1,379.37
483.45
53.96
2006
1,434.46
55.09
3.99
2007
1,897.13
462.67
32.25
2008
1,124.47
−772.66
−40.73
2009
1,682.77
558.30
49.65
2010
2,041.66
358.89
21.33
2011
1,825.74
−215.92
−10.58
2012
1,997.05
171.31
9.38
2013
2,011.34
14.29
0.74
2014
1,915.59
−95.75
−4.76
2015
1,961.31
45.72
2.39
2016
2,026.46
65.15
3.32
2017
2,467.49
441.03
21.76
2018
2,041.04
−426.45
−17.28
2019
2,197.67
156.63
7.67
Components
As of August 2017, KOSPI has over 760 components. Top 9 stocks by market capitalization are:
LargeCap, MidCap, and SmallCap indices based on market capitalization
KOGI corporate governance index
KODI dividend index
Industry indices like chemicals, electrical & electronic equipments, transport equipment, or banks.
KRX 100 and other KRX indices which take into account both stock markets of Korea Exchange — Stock Market Division and KOSDAQ Division
KOSPI 200
The KOSPI 200 index consists of 200 big companies of the Stock Market Division. The base value of 100 was set on 3 January 1990. It has over 70% market value of the KOSPI, and so moves along with the KOSPI index. KOSPI 200 is important because it is listed on futures and option markets and is one of the most actively traded indices in the world. The KOSPI is calculated as current market capitalization divided by base market capitalization. That is: Current index = Current total market cap of constituents × 100 / Base Market Capitalization Its all-time low is 31.96, reached on 16 June 1998, during the financial crisis. It closed above 200 for the first time on 24 April 2007.
KRX 100
KRX 100 is the index of 100 companies listed on Korea Exchange, including KOSDAQ's big companies. It's meant to replace KOSPI 200 as the key futures index, but has not been very successful to date.
KRX derivatives products
Stock Index Products: KOSPI 200 Futures, KOSPI 200 Options, STAR Futures
To trade futures and options contracts listed on KRX, a foreign investor may designate custodian banks as standing proxies. A custodian bank as a standing proxy opens accounts at foreign exchange banks and futures companies, deposits, and withdrawals investors' money and monitors investors' properties for them. A foreign investor should designate foreign exchange banks through a foreign currency exchange agreement to execute his foreign exchange transactions and transfers. Most foreign exchange banks also do custodian bank and standing proxy operations. A foreign investor should designate securities and futures companies to trade futures and options traded on KRX.
