Samsung Electronics and SK Hynix have completed their share buyback programs earlier than expected, drawing attention to the future of the KOSPI index. Samsung exceeded its initial buyback target, acquiring 100% of its planned shares, while SK Hynix reached 80% of its goal.
With the combined market capitalization of these two companies nearing 50% of the KOSPI, the end of their buybacks could eliminate a crucial support mechanism for the index, raising concerns about the difficulty of surpassing the 7000-point mark.
According to a disclosure from the Korea Exchange on October 2, Samsung has bought back 53.8 million shares as of the previous day, totaling 14.1565 trillion won. In August, Samsung announced its buyback plan, stating it would acquire 53.285968 million shares by November 21. The cumulative buyback rate now stands at 100.96%, exceeding the initial target.
However, Samsung has also applied to buy an additional 2 million shares. Reports indicate that the company plans to continue its buybacks until the total reaches 15 trillion won, suggesting it could acquire approximately 3 million more shares based on recent stock prices and average purchase costs.
SK Hynix, which began its buyback on August 20, has purchased 18.35 million of the 24.07 million shares it announced. The buyback rate is currently at 76.24%, with a cumulative expenditure of 32.0514 trillion won.
If SK Hynix continues to buy around 600,000 to 650,000 shares daily, it is estimated that it will complete the remaining 5.72 million shares within about 8 to 9 trading days. Given that it initially planned to finish its buyback by November 19, this timeline is expected to be accelerated by about a month.
With Samsung completing its buyback and SK Hynix likely to finish ahead of schedule, concerns about a supply gap have emerged. The buybacks from both companies have helped support the KOSPI against downward pressure from rising interest rates in major economies and U.S. Treasury yields. Corporate entities have absorbed selling pressure from foreign and individual investors, maintaining strong support at the KOSPI's lower threshold of 6500 points. The end of these buybacks could lead to increased uncertainty in the index as there may be no entity to absorb the selling pressure from foreign, individual, and institutional investors.
However, with Samsung set to announce its preliminary earnings on October 8, the third-quarter earnings season is expected to begin, potentially restoring profit visibility, particularly in the semiconductor sector, which could encourage foreign investors to return.
Han Ji-young, a researcher at Kiwoom Securities, stated, "While individual selling pressure is likely to be high, foreign investors could step in to absorb it. I expect that macroeconomic uncertainties will peak this month, and after the third-quarter earnings season, improved profit visibility will attract foreign net buying."
* This article has been translated by AI.
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