SEOUL, March 10 (AJP) -South Korea’s two most influential corporate names unveiled more than 21 trillion won ($14.3 billion) worth of share retirements on Tuesday, a sweeping shareholder-return move that could help stabilize the country’s stock market after the Middle East war abruptly halted its record rally.
Samsung Electronics said it will retire roughly 87 million treasury shares in the first half of this year, equivalent to about 16 trillion won based on Tuesday’s closing price.
SK Inc., the holding company of SK Group, on the same day announced it will cancel about 14.69 million shares — roughly 5.16 trillion won worth — representing nearly 20 percent of its outstanding shares.
Combined, the buyback retirements exceed 21 trillion won, marking one of the largest shareholder-return actions ever undertaken by Korean corporations.
The move comes as Korean equities attempt to recover from a sharp selloff triggered by the outbreak of war involving Iran in late February, which sent oil prices soaring and rattled markets heavily exposed to Middle Eastern energy supply routes.
Shares of Samsung Electronics, the world’s largest memory chipmaker, have fallen 13 percent to 187,900 won since Feb. 27, just before hostilities erupted.
SK Corp. declined 12.5 percent over the same period to 351,000 won, while SK hynix — the world’s second-largest memory producer — slid 11.6 percent from 1,061,000 won. SK owns 32.14 percent of SK Square which is the single largest shareholder of the chipmaking unit.
The declines helped drag the KOSPI lower after months of record gains as the economy relies largely on fuel imports from the Middle East.
Analysts say the massive share retirements could provide a counterweight to the market turbulence by shrinking share supply and signaling stronger capital discipline among Korea’s largest companies.
“Large-scale treasury share cancellations by flagship companies such as Samsung Electronics and SK could support valuations and help restore investor confidence,” a Seoul-based strategist said.
The announcements also align with broader corporate governance reforms introduced under President Lee Jae Myung, whose administration has pushed policies aimed at boosting shareholder returns and narrowing Korea’s longstanding “valuation discount” relative to global peers.
Under the latest revision of Korea’s Commercial Act that took effect last week, companies must cancel newly acquired treasury shares within one year and existing holdings within 18 months, except for limited purposes such as employee compensation.
Market watchers expect the policy shift — combined with the actions of market bellwethers like Samsung and SK — to accelerate share retirements across corporate Korea.
With the country’s two largest memory chip ecosystems taking the lead, the buyback wave could become an early test of whether shareholder-friendly reforms can help cushion Korean equities against global shocks.
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