South Korea Surpasses Canada to Become World's Seventh-Largest Stock Market

South Korea's Equity Market Surpasses Canada's as the World's Seventh Largest

South Korea's equity market has surpassed Canada's as the world's seventh largest, driven by a surge in demand for chips used in artificial intelligence. According to data compiled by Bloomberg, the total market capitalization of Korea-listed companies has increased by 71% this year to $4.59 trillion, while Canada's has climbed by approximately 7% to $4.5 trillion.

The rapid growth of Korea's equity market is largely attributed to the success of Samsung Electronics Co. and SK Hynix Inc., two chip heavyweights that have more than doubled in value this year. Samsung recently crossed the $1 trillion valuation mark, solidifying its position as a leader in the AI chip segment. The dominance of these two companies in the market has resulted in their products and stocks becoming highly sought after, further propelling the growth of Korea's equity market.

The crossover of Korea's equity market surpassing Canada's highlights the impact of index composition on national equity fortunes. With Samsung and SK Hynix accounting for 45% of the benchmark's weighting, Korea's market valuation has ridden a wave of semiconductor demand to shoot past major European markets like the United Kingdom and France. In comparison, the Kospi gauge has added more than 70% so far this year, while Canada's resource and finance-heavy equity benchmark S&P/TSX Composite Index has risen by just 7%.

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Experts predict that Korea's market capitalization is likely to expand further, driven by the AI-led memory cycle, while Canada's is more constrained given its heavy concentration in energy and financials.