Bloomberg: Korean Market Becomes the First Trillion-Dollar Market to Fall Below a 5x P/E

ChainCatcher report, according to Bloomberg data, the forward 12-month price-to-earnings ratio of South Korea’s KOSPI index has fallen to 4.2 times, becoming the first trillion-dollar market on record to drop below the 5x threshold. Among the 18 markets with market capitalizations exceeding $1 trillion at the start of this year, no benchmark index had previously experienced this situation. The cooling of the AI boom has triggered tech stock sell-offs, pressuring the Korean equity market. Despite South Korea’s exports approaching $1 trillion and continued strong demand for chips from SK Hynix and Samsung Electronics, investors remain reluctant to pay higher valuations for these companies’ earnings. Korean equities are now trading at valuations approaching those of Indonesia, which faces a potential MSCI downgrade, widening the discount. Bloomberg comments suggest that such an extremely low valuation could create room for future multiple expansion; if sentiment shifts, Korean stocks may outperform other markets in the short term. However, it remains uncertain when a recovery might begin or whether further declines are still possible—low P/E ratios alone do not indicate that a bottom has been reached.