South Korea's Kospi index breached the 6,900 mark for the first time on Monday, surging 5.1% to close at 6,936.9 points, as a record rally in semiconductor stocks and the Samsung family's completion of its inheritance tax payment buoyed investor sentiment. The index is now approaching the historic 7,000 threshold.
Samsung Electronics Leads Rally
Samsung Electronics jumped 5.4% to close at 232,500 KRW (£116.20), crossing the 230,000 KRW mark for the first time. The surge was driven by heavy foreign and institutional buying, fueled by strong earnings from US tech giants that boosted optimism for the global semiconductor industry. Analysts noted that the rally was seen as a clear sign of accelerating AI adoption.
Record Inheritance Tax Settlement
The Samsung family, including Chairman Lee Jae-yong, his mother, and sisters, completed payment of a 12 trillion KRW inheritance tax bill, the largest such settlement in South Korea's history. The tax is tied to the estate of late chairman Lee Kun-hee, who died in October 2020, leaving a 26 trillion KRW (£13.04 billion) fortune. The family paid the sum in six installments over five years, with the final payment confirmed on Sunday. The amount is equivalent to roughly one and a half times South Korea's total inheritance tax revenue for 2024. The country's inheritance tax rate is 50%, among the highest in the world.
Investor Relief and Stability
Investors expressed relief at the final payment, alleviating fears that the tax burden could affect the Lee family's control over Samsung, which spans electronics, construction, and financial services. The family had consistently sold shares and used credit loans to fund the payments. Jae-yong's mother sold around 15 million shares worth roughly £1.5 billion to meet the final installment. The family's combined net worth exceeds £33 billion, according to the Bloomberg Billionaires Index, more than doubling in the last year due to surging demand for chips amid the AI boom.
SK Hynix and Broader Market Impact
Fellow chipmaker SK Hynix also boosted the Kospi, rocketing 12.2% to 1,447,000 KRW. The stock has surged 113.7% year-to-date, driven by semiconductor demand. Elsewhere in the region, Taiwan's TAIEX index jumped 4.5% to 40,705.1 points, with index leader TSMC rising 6.5%, bringing its year-to-date gain to 43.5% at 2,275 TWD (£53).
