South Korea's Kospi index rises 1.4% to 5,609.95 at close

South Korea’s KOSPI index rose 1.4% to close at 5,609.95 on March 11, 2026, reflecting ongoing momentum from structural reforms and sector-specific tailwinds. The index’s recovery since late 2025 has been driven by a surge in AI semiconductor demand and corporate governance initiatives aimed at addressing the “Korea discount”. Memory chipmakers such as SK Hynix and Samsung Electronics have reported record profits, fueled by high-bandwidth memory (HBM) demand for AI infrastructure, contributing significantly to the index’s performance. Together, these two firms account for over 30% of the KOSPI’s market capitalization, amplifying the index’s sensitivity to shifts in AI sentiment and chip pricing.

Parallel efforts to enhance corporate value through dividend increases, share buybacks, and governance reforms have also bolstered investor confidence. The government’s “Value-Up” program, introduced in 2024, incentivized firms to improve shareholder returns, with total KOSPI dividends rising 12% year-on-year by 2024. A newly launched Value-Up Index, prioritizing companies with strong profitability and capital efficiency, has attracted domestic institutional and retail investment, further supporting the rally.

Despite the gains, valuation gaps persist: the KOSPI trades at a P/E of 17.6, below the Nikkei 225’s 25.9 and Samsung’s price-to-book ratio of 1.4x, which lags global semiconductor peers averaging 3.0x. Political stability under President Lee Jae-myeung, coupled with legislative changes to strengthen shareholder rights, has reinforced the structural case for the market. However, risks remain, including geopolitical tensions, potential AI spending slowdowns, and currency volatility for foreign investors according to market analysis. The index’s trajectory will likely hinge on sustained corporate reforms and global demand for AI hardware in the near term.