Samsung, SK hynix near end of buybacks, leaving KOSPI without clear buyer

Korea's stalling stock market could soon lose a key source of support as Samsung Electronics and SK hynix near the completion of their share buyback programs, market watchers said Sunday.

According to the Korea Exchange's corporate disclosure system, Samsung Electronics has repurchased 39.8 million shares over 20 trading days since Aug. 24. That amounts to 74.69 percent of its planned buyback of 53,285,968 shares. The cumulative value of the purchases stands at 10.31 trillion won ($7.41 billion).

SK hynix has also bought back 14.15 million shares over 22 trading days since Aug. 20, completing 58.79 percent of its planned repurchase of 24.07 million shares. The cumulative value of the purchases stands at 24.39 trillion won.

Samsung Electronics and SK hynix had planned to continue their buybacks through Nov. 21 and Nov. 19, respectively. At the current pace, however, both programs are likely to be completed by mid-October.

Samsung Electronics has been buying back an average of about 2 million shares a day. If that pace is sustained, the company is expected to complete the buyback in six to seven trading days.

SK hynix has also been repurchasing an average of about 650,000 shares a day, putting it on track to buy back the remaining 9.92 million shares within 15 to 16 trading days.

Net purchases by corporate investors had previously accounted for only a small share of KOSPI activity. In the first half of this year, there were just 83 trading days when their net buying or selling exceeded 100 billion won.

But between Aug. 20, when SK hynix began its share buyback, and Friday, corporate investors bought a net 33.2 trillion won of shares. Over the same period, foreign and retail investors sold a net 18.45 trillion won and 14.96 trillion won, respectively, while institutional investors bought a net 274.9 billion won.

The expected end of the buybacks comes at a sensitive time for the market. A prolonged war in the Middle East, high U.S. Treasury yields, successive policy rate increases by major economies and concerns over a potential slowdown in artificial intelligence investments have weighed on equities.

"Buying by other corporations has been helping put a floor under the market amid heightened external uncertainty," said Lee Kyoung-min, an analyst at Daishin Securities. "But it would not be enough to prevent the index from falling if selling by foreign and institutional investors intensifies."

Attention is now turning to the third-quarter earnings season, which begins next month and could provide a catalyst for a shift in market flows. Strong results from major companies, including chipmakers, could help draw foreign investors back into Korean equities.

Investors are also watching for signs that Samsung Electronics and SK hynix could announce additional shareholder-return measures. Further dividends, buybacks or share cancellations after the current programs end could help offset concerns over a potential gap in market demand.

"I continue to maintain the view that Samsung Electronics will announce a much bigger buyback/cancellation program in January 2027," said Douglas Kim, CEO of Douglas Research Advisory, who publishes on Smartkarma.