The domestic stock market declined sharply due to disappointment over Samsung Electronics' shareholder returns. After regaining the 6000-point mark the previous day, buoyed by SK Hynix's record earnings and substantial shareholder return announcement, the KOSPI index fell as Samsung Electronics postponed the announcement of specific additional shareholder return plans until next year. Despite achieving its highest-ever earnings, the company failed to meet the market's heightened expectations, leading to a rapid decline in investor sentiment.
According to the Korea Exchange on October 29, the KOSPI closed at 5937.66, down 74.78 points (1.24%) from the previous trading day. After surging over 6% the day before and recovering the 6000-point mark for the first time in ten trading days, the index relinquished that level within a day. The index started strong, surpassing 6100 points in early trading, but turned downward during Samsung Electronics' earnings conference call, leading to increased selling pressure.
The KOSDAQ index also closed down 18.05 points (2.34%) at 753.23.
In the securities market, individual investors made a net purchase of 635.7 billion won. Meanwhile, foreign and institutional investors sold a net 307.7 billion won and 577.5 billion won, respectively, contributing to the market's volatility.
Samsung Electronics led the decline in the stock market. The company reported record third-quarter revenues of 195.25 trillion won and operating profits of 107.44 trillion won, yet its stock price fell by 10,000 won (4.13%) to close at 232,000 won.
During the conference call, the confirmed cash dividend plan of 30 trillion won and the share buyback and cancellation plan did not meet market expectations, resulting in disappointment among investors. The announcement of the remaining resource utilization plan, which was anticipated to be between 55 trillion and 75 trillion won, and additional details on share buybacks and cancellations has been postponed until a board meeting in January. Analysts suggest that the heightened expectations following SK Hynix's substantial shareholder return announcement contributed to the disappointment.
Among the top market capitalization stocks, there was a mix of gains and losses. LG Energy Solution dropped 8.60% due to the announcement of a 2.5 trillion won stake disposal by its largest shareholder, LG Chem. Samsung Electro-Mechanics (-1.00%) and Hyundai Motor (-1.18%) also saw declines. In contrast, SK Hynix, which announced a large-scale shareholder return the previous day, rose 2.62% to close at 1,526,000 won, supporting the lower end of the index.
Market analysts noted that while Samsung Electronics' earnings were solid, the delay in finalizing the shareholder return plan, which could provide short-term momentum for the stock price, was disappointing.
Jin-hyuk Kang, a senior researcher at Shinhan Investment Corp., stated, "While the plan to prioritize the purchase of preferred shares based on a net cash position of 197.6 trillion won was revealed, the postponement of the remaining resource utilization plan until the end of January led to selling pressure from disappointed investors."
* This article has been translated by AI.
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