SK hynix (000660.KS) has completed a 40 trillion won ($28 billion) share buyback, raising concerns that the buying base that supported South Korea's stock market amid foreign selling may weaken now that both SK hynix and Samsung Electronics have wrapped up their repurchase programs.
The company said on the 21st that it completed the 40 trillion won buyback, which began on Aug. 20, on that day. The original end date disclosed by the company was Nov. 19, meaning the purchases concluded about a month early.
SK hynix had said it would spend 40.0434 trillion won to acquire 24.07 million shares and cancel all of them. The amount represents about 3.3% of outstanding shares and is the largest share cancellation by value among South Korean listed companies.
Before SK hynix, Samsung Electronics (005930.KS) spent about 15 trillion won to acquire 56.85 million shares between Aug. 24 and Oct. 6. After Samsung Electronics ended its buyback, retail investors took on the role of absorbing the shares put up for sale. With SK hynix also finishing its purchases, the role of other buyers in absorbing selling in large-cap chip stocks has become more important. Analysts said maintaining a supply-demand balance will require either new buying to come in or existing selling pressure to ease.
Whether the companies conduct additional buybacks is seen as a key variable in filling the gap. SK hynix plans to disclose further shareholder return measures when it reports third-quarter earnings on the 28th.
