Samsung Electronics and SK Hynix are expected to conclude their stock buyback programs as early as mid-next month. Analysts suggest that if the current pace continues, the buybacks could finish ahead of the originally scheduled end dates in November.
According to a disclosure from the Korea Exchange on September 20, Samsung Electronics reported that it had purchased 39.8 million shares over the past 20 trading days, starting from August 24. This figure represents 74.69% of the planned total buyback of 53,285,968 shares, with a cumulative expenditure of 10.3 trillion won.
Similarly, SK Hynix has bought back 14.15 million shares since August 20, completing 58.79% of its total planned buyback of 24.07 million shares, with a cumulative spending of 24.39 trillion won. Combined, the total buyback expenditure for both companies amounts to 34.7 trillion won.
The conclusion of the buybacks appears to be moving up. Initially, Samsung planned to continue its buyback until November 21, while SK Hynix aimed for November 19. However, given the current buying speed, both companies are likely to finish by mid-next month.
Samsung is currently averaging about 2 million shares purchased per day, and with 13,485,968 shares remaining, it is estimated that the buyback will be completed in about 6 to 7 trading days. SK Hynix, averaging around 650,000 shares daily, is expected to take approximately 15 to 16 trading days to buy back the remaining 9.92 million shares.
Considering the upcoming Chuseok holiday, the alternative holiday for Gaecheonjeol, and Hangeul Day, the buybacks are likely to conclude by mid-next month.
However, there are concerns that the end of these buybacks could exert downward pressure on the stock market. The large-scale buybacks by both companies have provided a buffer against unfavorable macroeconomic factors, including high interest rates due to prolonged conflict and successive policy rate hikes in major economies, as well as discussions around moderating the pace of artificial intelligence (AI) advancements.
In fact, the sidecar measures that had been frequently activated have not been triggered since August 20. While regulatory impacts on single-stock leveraged exchange-traded funds (ETFs) have played a significant role, the buybacks by Samsung and SK Hynix have also been crucial in preventing sharp declines in the index.
Some analysts express concerns about the lack of supportive market participants to sustain the KOSPI after the buybacks conclude. With the index recently trapped in a range and trading volumes plummeting, there are few clear sources of demand beyond the buybacks.
Market experts believe that the inflow of foreign capital will be pivotal for any rebound. However, the macroeconomic environment remains challenging for increased investment in emerging markets or risk assets. The prolonged conflict has kept international oil prices, such as Brent crude, above $100, while the yield on 10-year U.S. Treasury bonds is nearing 5%.
* This article has been translated by AI.
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