[Editorial] KOSPI Surpasses 7,000; Need to Address Volatility and Widening Asset Gap

South Korea's stock market has reached an unprecedented milestone, with the KOSPI index breaching the 7,000 mark for the first time in its history. This remarkable achievement, occurring just 70 days after crossing the 6,000-point threshold, is largely propelled by the stellar performance of the nation's semiconductor giants, Samsung Electronics and SK Hynix. Their shares surged by over 14% and 10% respectively on the day the index hit its new high, reflecting a global boom in artificial intelligence (AI) and the demand for advanced chips.

This semiconductor-driven rally, however, has created a significant concentration within the market. Semiconductor companies now account for a staggering 42% of the KOSPI's total market capitalization and are estimated to contribute over 70% of its operating profits. While this has fueled a "super cycle" for the sector, with some analysts predicting the KOSPI could reach 10,000 by year-end, it also raises concerns about market imbalance and over-reliance on a single industry. Notably, despite the overall market surge, a considerable number of listed companies (260 out of 940) have seen their stock prices decline over the past year.

The rapid ascent of the stock market, while boosting household assets and potentially stimulating consumption and corporate investment, has also amplified market volatility. The KOSPI's market cap has tripled in just one year, evidenced by fourteen "sidecar" activations (temporary trading halts) this year alone. This heightened volatility, coupled with external uncertainties such as potential AI investment slowdowns, geopolitical risks in the Middle East, and trade negotiations, necessitates a cautious approach. The article specifically warns against the growing trend of " 신용거래융자" (credit trading balance), which has reached record highs, driven by "FOMO" (fear of missing out), urging investors to avoid taking on excessive debt for speculative trading.

Furthermore, the widening wealth gap is a significant concern. The article calls for a renewed consideration of the financial investment income tax, which was previously abolished by the Yoon Suk-yeol administration citing market contraction fears. With the KOSPI now surpassing 7,000, the rationale for delaying discussions on taxing capital gains from stock investments is diminished. The editorial emphasizes that now is the time to address this issue to ensure a more equitable distribution of the market's gains and to mitigate the social implications of increasing asset disparity.