Financial Stocks Top KOSPI Index Gains This Month

Gains Far Outpace KOSPI by More Than Fourfold

While the KOSPI has repeatedly hit all-time highs so far this month, indices related to the financial sector have ranked at the top in terms of gains.

According to the Korea Exchange on the 16th, among KOSPI indices, the one with the highest rate of increase this month was the securities index. Based on closing prices, it climbed 24.50%, from 6172.47 on January 30 to 7684.70 on February 13. This is more than four times the KOSPI’s gain of 5.31% over the same period.

The KOSPI 200 Financials Index, which is composed of 22 constituents including major financial holding companies as well as banks, insurers, and securities firms, posted the second-highest increase at 22.34%, followed by telecommunications (14.59%), insurance (13.81%), financials (13.72%), and construction (13.37%).

In the KRX indices, which cover both the KOSPI and KOSDAQ markets, the financial sector was also outstanding. Over the same period, the KRX Banks Index surged 25.36%, recording the highest rate of increase, followed by the KRX 300 Financials (22.22%), KRX Securities (21.189%), and KRX Insurance (17.18%).

This is interpreted as buying demand concentrating on bank and insurance stocks, which are regarded as high-dividend names ahead of dividend payments. In particular, the application of separate taxation on dividend income starting from dividends paid this year is also playing a role. Kim In, an analyst at BNK Investment & Securities, said, "With separate taxation on dividend income, bank stocks have become a favorable investment vehicle for high-net-worth investors whose annual financial income is expected to exceed 20 million won," adding, "On top of this, as the introduction of tax-exempt dividends is also highly likely, the appeal of bank stock dividends is expected to expand further for general investors as well."