South Korea’s Chip Surge Hides the Market’s Vulnerabilities

South Korea’s world-beating equity rally this year would appear to be the perfect advertisement for President Lee Jae Myung’s efforts to increase household investment in stocks — a generally healthy goal that can foster wealth creation and deepen the pool of capital available to businesses.

But a truly healthy investing culture starts with diversification, something that isn’t easy in the South Korean stock market today. In fact, the concentrated nature of the current rally shows why the market still isn’t well-suited to helping residents invest for the future.