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The Kospi, South Korea's benchmark equity index, has returned to bull-market territory. Investors piled back into the semiconductor companies that dominate the index, reversing a rout that had weighed on Korean equities.
The speed of the recovery reflects the structure of the index as much as any change in the underlying businesses. The constraint here is index composition.
The Kospi is not a diversified read on South Korean economic activity.
A small number of semiconductor giants carry an outsize share of its weight, which means the benchmark behaves less like a broad economy-wide barometer and more like a chip-sector proxy with a Korean address.
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