[Edaily Reporter Kim Kyung-eun ] Following SK hynix(000660), SamsungElectronics(005930)has announced a shareholder return plan, raising expectations that the KOSPI may stage a V-shaped rebound. While market headwinds—such as rising U.S. long-term Treasury yields and international oil prices—persist, analysts predict that large-scale shareholder returns will provide support against further declines in stock prices. This week’s (August 24–28) scheduled earnings release from U.S.-based NVIDIA and the Jackson Hole Symposium are also cited as key factors that could influence the direction of the KOSPI.

According to MP Doctor on the 23rd, the KOSPI closed at 6,912.95 last week (as of the 21st), down 0.93% from the previous week (the 14th). Although the index fell early in the week due to the aftermath of a sharp rise in U.S. Treasury yields, it rebounded starting on the 20th, buoyed by SK hynix’s shareholder return policy.

On the 21st, expectations for SamsungElectronics’ shareholder returns supported the index from falling further. On that day, SamsungElectronics’ stock price closed at 281,500 won, up 3.87% from the previous day. However, after the shareholder return announcement, it closed at 270,000 won on the NexTrade (NXT) after-hours market—a 4.1% drop from the closing price.

SamsungElectronics announced that it held a board of directors meeting on the 21st and approved a plan to implement shareholder returns totaling 90 trillion to 110 trillion won this year. This amount represents 50% of the free cash flow (FCF) for the three-year period from 2024 to 2026, minus the 29.3 trillion won already returned to shareholders last year and the year before. SamsungElectronics plans to first distribute approximately 30 trillion won in cash dividends this year, including the regular dividend for the third quarter. This amounts to a dividend of 5,000 won per share, with specific details to be determined at a board meeting in late October.

The scale of this shareholder return is the largest in the history of South Korean listed companies. However, some voices of disappointment have emerged, as the market had held optimistic expectations that SamsungElectronics’ free cash flow (FCF) this year would exceed 260 trillion won, with 50% of that—130 trillion won—being used for shareholder returns. The decline in the stock price in after-hours trading is also interpreted as the result of selling pressure from disappointed investors.

Nevertheless, the securities industry believes that the large-scale shareholder return policy of the KOSPI’s flagship stock will lead to a revaluation of the broader stock market. Analysts suggest this will serve as an opportunity to normalize valuations, given that domestic listed companies have historically been relatively undervalued despite high return on equity (ROE).

Kim Jong-min, a senior research fellow at SamsungSecurities, stated, “The Korean stock market is currently undergoing a shift in valuation criteria—from a simple profit ‘cycle’ (price-to-earnings ratio, or PER) to a ‘trend’ of shareholder value return (sustainable ROE),” adding, “The regularization of shareholder returns based on profit growth will be the key driver to resolve the chronic ‘Korea discount’ and lead to a revaluation of the broader market.”

Lee Jae-won, an analyst at Yuanta Securities Korea, also explained, “Share buybacks and cancellations are not merely short-term supply-and-demand events.” He added, “A decrease in the number of shares outstanding leads to an increase in earnings per share (EPS) and a decline in the P/E ratio, while the return of excess capital results in a reduction in equity and an improvement in ROE.” He further emphasized, “If capital efficiency improves through repeated share buybacks, the market will have grounds to assign a higher price-to-book ratio (PBR); therefore, expanded shareholder returns are also viewed as a factor contributing to valuation re-rating and the alleviation of the Korea discount.”

Key market variables this week include NVIDIA’s earnings release on the 26th (all times local) and the Jackson Hole Symposium taking place from the 27th to the 29th. Analysts suggest that strong earnings and positive guidance from NVIDIA could contribute to improved investor sentiment toward artificial intelligence (AI) and semiconductors, potentially triggering a second rebound in the domestic stock market. The Jackson Hole Symposium is expected to influence the direction of the stock market, as it provides insights into the U.S. Federal Reserve’s (Fed) monetary policy direction.

Na Jeong-hwan, an analyst at NH INVESTMENT & SECURITIES, said, “The key to NVIDIA’s earnings is whether it can maintain high gross profit margins,” adding, “This is because even if revenue increases, if margins are eroded, questions may arise about the profitability of AI investments themselves.” He added, “Whether the company mentions supply constraints for high-bandwidth memory (HBM) and advanced packaging will also be a key point to watch,” noting, “The more supply is identified as a bottleneck, the more favorable it is for the pricing power of domestic memory manufacturers.” He projected this week’s KOSPI range to be between 6,400 and 7,500.

On the 26th, the U.S. July Personal Consumption Expenditures (PCE) data will be released. On the 27th (Korea time), the Bank of Korea’s Monetary Policy Committee (MPC) will set the benchmark interest rate. With U.S. inflation data and the BOK MPC meeting taking place in quick succession, volatility is likely to increase depending on the direction of domestic and international monetary policy.

Lee Kyung-min, an analyst at DaishinSecurities, said “Since the minutes of the July Federal Open Market Committee (FOMC) meeting confirmed that the Fed remains vigilant about inflation, it is necessary to pay close attention to Chair Kevin Warsh’s interpretation of inflation and his views on further rate hikes at the Jackson Hole symposium,” he said. “If the PCE data again confirms a slowdown in inflation and concerns about monetary policy ease, there is a high likelihood that risk appetite will strengthen once more, alongside stabilization in government bond yields.”