South Korea's equity market has overtaken Canada's as the world's seventh largest, propelled by insatiable demand for chips powering artificial intelligence.
The total market capitalization of Korea-listed companies has surged 71% this year to $4.59 trillion, while Canada's has climbed about 7% to $4.5 trillion, data compiled by Bloomberg show. Samsung Electronics Co., which recently crossed the $1 trillion valuation mark, and SK Hynix Inc. have both more than doubled this year as their dominance in the AI chip segment made their products - and stocks - highly sought after.
The crossover underscores how index composition is determining national equity fortunes.
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With the two chip heavyweights 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. 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 just 7%.
"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," said Ha SeokKeun, chief investment officer at Eugene Asset Management Co.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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