South Korea's stock market is experiencing a 'crazy bull' run, surging nearly 74% year-to-date to lead global gains, with total market capitalization increasing by approximately 11 trillion yuan. A stock trading craze has swept across the entire society, with an average of two stock accounts per person. Some have seen gains of up to 400 times their investment. Office workers hide in restrooms to check prices, retail investors are heavily utilizing leverage, and new accounts for minors surged nearly tenfold in the first quarter. Support from President Lee Jae-myung, coupled with a boom in the AI memory chip industry, has fueled the index's relentless climb. However, the Buffett Indicator has entered a dangerous zone, foreign capital is taking profits and exiting at highs, signaling underlying risks beneath the狂欢.
"I bought SK hynix, and I feel confident and happy." Kim Min-jeong (a pseudonym), a 35-year-old who just entered the Korean stock market in March this year, immediately reaped the rewards. Year-to-date, the KOSPI index has surged nearly 74%, leading global markets, with total market cap growing by approximately 260 trillion won (about 11 trillion yuan). Although the market plunged over 6% on May 15th, investors remain optimistic.
Behind this 'crazy bull' market lies nationwide participation and strong government support. Office workers take leave to trade stocks, hide in restrooms to monitor the market, new accounts for minors surge, and retail investors enter the market with leverage... Ordinary Koreans view stock trading as a way to break free from the perceived 'class rigidity' of Korean society. President Lee Jae-myung also considers boosting the stock market a key government task. Kim Min-jeong made her first stock purchase during a period of market panic. Until mid-March this year, Kim was a housewife with no prior experience in stocks. At that time, tensions in the Middle East involving the US, Israel, and Iran caused severe volatility in the Korean market, with heavy foreign selling and frequent circuit breakers. She noticed on social media that SK hynix's stock price was showing unusual strength. Inspired by a friend who quit her job to invest in funds full-time, Kim used her husband's account to buy one share of SK hynix after its price plummeted from a high of over a million won. "I entered at around 920,000 won. Due to the Middle East war, it immediately dropped to 850,000 won after I bought. The price fluctuated back and forth, I got scared and sold at 970,000 won. Later, I bought back at 950,000 won and took profits when it rose to around 1.1 million won," Kim Min-jeong told reporters. This trade gave her an initial taste of success. By late April, she had opened her own account. She told reporters that when she entered, the KOSPI index was around 5500 points, and now it's over 8000 points. "The Korean market isn't just a bull; it's a 'crazy bull,' very illogical and counter-intuitive. Last Friday, I bought one share of SK hynix for a friend, and by Monday, it had earned about 220,000 won (roughly 1000 yuan). My brother bought a Hong Kong-listed 2x leveraged ETF on SK hynix last Friday with 100,000 HKD and made a 30% profit by Monday."
Kim Min-jeong is just one example of the frenzy among Korea's 'ant army' of retail investors. According to her, her husband's company supervisor once even took leave to withdraw money from a bank counter to trade stocks. "Korean bank cards have transaction limits; for large operations, you have to go to the counter." Furthermore, many elderly people in their seventies and eighties are also trading stocks. "The older generation lived through the 'Asian Tiger' era, saw Korea's most prosperous economic times, and they learned about investing back then." From commuter subways to workplace lunch tables, discussions about the stock market are now ubiquitous in Korea. Reports indicate that recently, employee restroom stalls in a department store in Seoul's Gangnam district were consistently full at 3:30 PM, as employees rushed to check stock apps before the market close. A caregiver, Mr. Choi, recently started work an hour early daily to participate in a so-called 'aunty stock recommendation group' in the break room. Opening stock accounts for children has also become popular among parents. "Giving money directly to children is taxable, but investing through a stock account is tax-free," Kim Min-jeong explained. "So, opening an account for a child to invest is considered a form of savings to some extent. My sister-in-law was originally very opposed to stock trading, but now the market is so hot that she's also planning to open an account for her child." Goldman Sachs data shows that over the past five years, the total number of stock trading accounts in Korea has doubled. As of February 26th this year, the number of active stock trading accounts in Korea exceeded 102 million. With a total population of approximately 51.6 million, this means an average of about two stock accounts per person. About one-third of the population directly participates in stock trading, a proportion nearly five times that before the pandemic (7%). According to data compiled by Toss Securities, new account openings for Koreans under 18 years old surged nearly tenfold year-over-year in the first quarter.
Even more疯狂ly, leveraged 'all-in' bets have also become a market trend. On May 7th, a post titled "Leveraged all-in on hynix, full 2.2 billion, charge!" gained attention on the anonymous workplace community Blind. The poster's持仓screenshot showed that through credit financing of up to 1.697 billion won,加上自有资金, they had purchased nearly 2.2 billion won (about 10 million yuan) worth of SK hynix stock. According to data from the Korea Financial Investment Association, in early May, margin debt in the Korean stock market soared to a record 36.3 trillion won, a 32% increase from the end of December last year and a surge of over 8.9 trillion won compared to January's 27.4 trillion won. Multiple brokerages urgently suspended new margin lending businesses at the end of April. Regarding Korea's '全民炒股' phenomenon, Wang Xinjie, Chief Investment Strategist at Standard Chartered China's Wealth Solutions Department, analyzed, "Historically, Korean retail investors have a 'gambling' attribute. After the 1997 Asian financial crisis, the 2002 credit card bubble, and even following the 2008 global financial crisis, Korean散户were among the first groups to start leveraging up to buy the dip in the stock market. This seemingly 'all-in' speculative behavior is seen by them as one of the means to escape 'class rigidity.'" A 28-year-old Korean office worker calculated: with a monthly salary of 4 million won, an apartment in Seoul costs over 2 billion won. Even without eating or drinking, it would take over 40 years to buy a home. "With current income, saving will never be enough to buy a house. Investment is the only choice." A Korean media outlet reported an even more extreme example. Six years ago, before going to prison, Mr. A used his entire savings of 261 million won (about 1.2 million yuan) to purchase 30,000 shares of Hyosung Heavy Industries at 8,530 won per share. After being released in April this year, Mr. A checked his account, claiming its total value had grown to 105.21 billion won, a return of 40,228%. Korean media also reported that an anonymous poster said over a decade ago, her mother took her to a securities company and used over 30 million won to purchase SK hynix stock as her marriage fund. According to her shared account screenshot, she currently holds 782 shares of SK hynix. The purchase price was 33,554 won per share, and as of May 15th, the price had risen to 1.819 million won per share, a return of over 5300%. Kim Min-jeong said Koreans love reading such news.
Behind the nationwide stock market狂欢lies the strong push from President Lee Jae-myung. During his presidential campaign last year, Lee Jae-myung pledged a "KOSPI at 5000 points." This president, who once revealed in an interview that he had "lost everything" in the stock market, hopes to redirect social funds from the overheated real estate market to the stock market. He has even publicly criticized citizens for investing in overseas stock markets. According to Korean media reports, to show his commitment, he personally purchased 40 million won worth of stock ETFs a few days before the election last June and promised to invest 1 million won monthly for five years if elected. Within a month of taking office, President Lee pushed for revisions to expand fiduciary duty scope to enhance board accountability, followed by reforms to dividend taxes to encourage payouts, expanded enforcement resources to combat market misconduct, and announced a roadmap for inclusion in MSCI's developed market status, aiming to boost corporate value. In February this year, the Korean National Assembly passed a key revision to the Commercial Act, requiring listed companies to cancel repurchased treasury shares. In March, the Korean government announced it would "in principle prohibit" listed companies from spinning off subsidiaries for separate listings again. "Dual listings" have long been seen as a structural root cause diluting parent company equity value and contributing to the "Korea discount." A Korean official recently stated that Korea's price-to-book ratio is far below the average of about 3 times for developed economies and called for moving from the "Korea discount" to a "Korea premium." Wang Xinjie told reporters, "Since 2025, the Korean government's advocacy for improving shareholder returns has attracted foreign capital's attention.加上the eastward shift of demand for AI upstream hardware, foreign net buying has increased significantly. After upward momentum was established, Korean institutions and散户followed into the market." To facilitate stock trading for office workers, the Korea Exchange even plans to extend trading hours. Starting this September, the exchange will add pre-market and post-market trading sessions, extending total trading time from the current 6 hours and 30 minutes to 12 hours. Participants in the extended sessions will primarily be ordinary散户, mostly working professionals unable to trade during normal business hours.
The government's reform resolve has resonated with the爆发of the AI industry. Benefiting from increased demand for traditional memory chips and HBM chips for AI servers, as of the May 15th close, Samsung Group's total market capitalization reached 1725 trillion won, and SK hynix's reached 1296 trillion won. Combined, the two groups account for 49.25% of the total KOSPI market capitalization. SK hynix employees are also experiencing a wealth狂欢. The average performance bonus for 2025 is about 140 million won (approximately 650,000 yuan), a company record high. According to Macquarie Securities, the average bonus this year is expected to reach about 3.2 million yuan. Amid high performance bonuses, SK hynix-related positions have become highly sought after, with大批求职者rushing in. Korean media reports that Korean job-seeking communities have even sparked a讨论热潮about 'actively lowering educational qualifications for job applications': many job seekers with bachelor's or master's degrees plan to deliberately conceal their higher education background to apply for production line positions; some current undergraduate students directly post咨询asking if they can take a leave of absence to apply for jobs. While also in the memory chip business, Samsung Electronics stands on the brink of its largest production shutdown crisis in history. On May 13th, after marathon negotiations lasting 17 hours, Samsung's labor and management declared talks had broken down, and the planned 18-day strike starting May 21st would proceed. Song Young-ki (phonetic), who works in logistics for Samsung's chip division assembly line, told media in an interview, "Many employees have jumped ship to SK hynix."
Wall Street investment banks also remain看好of the Korean stock market. JPMorgan Chase raised its KOSPI index base target from 7000 points to 9000 points and its bull scenario target from 8500 points to 10000 points, implying about 33% further upside. Korean domestic brokerage Hyundai Motor Securities even called for 12000 points.
However, some data is已经开始'sounding alarms.' The ratio of Korea's total stock market capitalization to GDP (the "Buffett Indicator") has soared into the dangerous zone above 200%. 'Smart money' is also taking profits and exiting at highs. Wang Xinjie revealed to reporters that as of May 12th, foreign capital had sold Korean stocks for the sixth consecutive day, while散户counter-trend net bought 6.5 trillion won. Domestic institutions also switched from net buyers to net sellers of 1.29 trillion won in the afternoon of the same day. Additionally, according to data from etf.com, asset management giant BlackRock's iShares MSCI Korea ETF saw net outflows of $1.05 billion last week (May 4-8), a record, and suffered another $105 million in net outflows on May 12th.
"We believe the risk of a correction in the Korean stock market has increased in the coming weeks," warned Steve Brice, Global Chief Investment Officer at Standard Chartered Bank. Wang Xinjie explained to reporters that although the current rolling P/E ratio of the KOSPI (about 17x) is far below that of the Nasdaq index, its 10-year valuation percentile has reached over 90%. This means that while not at an extreme overvaluation level, its rapid rise has accumulated considerable correction risk. On May 15th, the KOSPI index briefly broke through 8000 points in the morning before plunging, closing down 6.12% at 7493.18 points. On that day, SK hynix fell 7.66%, and Samsung Electronics dropped 8.61%. However, Kim Min-jeong is not worried. "I think the Korean government won't allow the stock market to crash; it's a matter of national destiny," she told reporters. "My husband and I are now believers in AI, and memory chips are a necessity." "Now, Korea is divided into two kinds of people: those who bought SK hynix (stock) and those who didn't. I bought SK hynix, I feel confident and happy, I got on board," Kim Min-jeong said.
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