Global investors are increasingly focusing on the South Korean stock market.

Shortly after historically surpassing the 6,000-point mark yesterday, South Korea's KOSPI index broke through 6,200 points shortly after opening today, setting another record high. As of 9:35 Beijing time on February 26, the KOSPI index was trading at 6,200 points, up nearly 2%.

From 2,400 points at the beginning of 2025 to 4,214 points by the end of the year, the KOSPI index rose over 75% throughout 2025, embarking on a continuous record-breaking trend.

Entering 2026, the South Korean stock market has accelerated its rally. From the start of the year to the recent breakthrough of 6,200 points, the KOSPI index has accumulated a gain of over 46% in less than two months, leading global equity markets. Furthermore, closing data from yesterday, February 25, shows that the total market capitalization of South Korean stocks has exceeded $3.76 trillion, surpassing France and Germany to become the world's ninth-largest stock market.

Despite substantial short-term gains, the upward momentum of the South Korean stock market is far from over.

On February 23, Nomura Securities released a latest research report, significantly raising its target for the KOSPI index to 7,500–8,000 points for the first half of 2026. This revision is based on an expected price-to-earnings ratio of 12–13 times and an expected price-to-book ratio of 2.1–2.2 times for the South Korean market in 2026. This implies that, in Nomura's view, the KOSPI still has at least 23%–31% upside potential from its closing level of 6,083.86 points on February 25.

Nomura is the first international investment bank to set a KOSPI target in the 8,000-point range. Of course, Nomura's forecast is not without basis. The firm believes that a supercycle in the memory semiconductor industry and value enhancements from corporate governance reforms will simultaneously drive earnings growth and valuation re-rating for South Korean stocks.

The sustained rise of the KOSPI is primarily fueled by strong growth from semiconductor and other technology giants, while the artificial intelligence boom has also boosted South Korea's economic momentum.

Nomura Securities pointed out that soaring memory semiconductor profits are a key driver behind the target upgrade. A memory supercycle centered on traditional DRAM and high-bandwidth memory is accelerating earnings growth for South Korean companies.

Nomura forecasts that South Korean companies' earnings per share will surge 129% year-over-year in 2026, with a further 25% increase expected in 2027. Memory semiconductor companies are projected to contribute 64% of the total market's net profit, acting as the core engine for earnings growth.

Behind the KOSPI's rapid ascent, semiconductor giants like Samsung Electronics and SK Hynix have become the market's dominant leaders.

From the start of 2026 through yesterday's close, February 25, Samsung Electronics rose 69.72%, while SK Hynix gained 66.6%, both significantly outpacing the KOSPI's 44.37% rise over the same period.

More critically, as of yesterday's close, the market capitalizations of Samsung Electronics and SK Hynix stood at $817 billion and $504.9 billion, respectively, totaling $1.3219 trillion. This represents 35% of the total market capitalization of listed South Korean companies, underscoring their substantial influence in the market.

For a long time, the South Korean stock market has been a value play among major global markets, often overlooked by foreign investors.

Cindy Park, Head of Korea Research at Nomura Securities, believes that a series of financial reforms implemented after President Lee Jae-myung took office are also contributing to the market's rally. These reforms include establishing rules to create a level playing field for all shareholders and strengthening board accountability.

Additionally, on February 26, South Korea's parliament is expected to pass a bill mandating companies to cancel treasury shares. The market anticipates that as policies aimed at enhancing corporate value take effect, the long-standing "valuation discount" in South Korean equities may ease, further driving a market re-rating.

Crucially, the rise in South Korean stocks is supported by solid capital inflows.

Nomura Securities notes that South Korean household asset allocation is shifting from real estate to financial assets. Data shows that Korean investor deposits surged from 50 trillion won at the start of 2024 to 106 trillion won in January 2026. Over the same period, demand deposits at the top five banks decreased by 22 trillion won in a single month. Similar to deposit shifts seen when Chinese time deposits matured en masse, South Korean investors are moving funds from banks to the stock market amid the ongoing bull run.

This bull market, which began in 2025, is forcing South Koreans to reconsider their longstanding preference for real estate.

For decades, real estate has been viewed by many as the primary path to wealth, accounting for nearly three-quarters of household assets. Peter S. Kim, Global Investment Strategist at KB Securities, stated, "The era of disproportionately high real estate allocation is poised for reversal." He considers this shift "one of the most profound trends in South Korea over the next decade."

Clearly, this structural transition of household assets from real estate to financial assets is set to bring more incremental capital into the South Korean stock market.

Furthermore, active participation by foreign investors is providing additional capital and sustaining the market's upward trend.

Data indicates that foreign investment in South Korean stocks increased to 1,327 trillion won in 2025, nearly double the 673 trillion won recorded in 2024.

Concurrently, foreign investors' share of the total South Korean stock market capitalization rose from 27% in 2024 to 30.8% in 2025. U.S. investors are the largest source of foreign capital, currently holding approximately 546 trillion won worth of South Korean equities.

The South Korean stock market's rally is not slowing down but accelerating.

As of 9:35 Beijing time on February 26, Samsung Electronics shares rose as much as 7% to a high of 217,500 won, with its market capitalization approaching $900 billion. SK Hynix shares climbed over 3% to a high of 1,053,500 won, with both companies continuing to lead the South Korean market.