[Edaily Reporter PARK MIN ] SamsungElectronics(005930)and SK hynix(000660), which together account for about half of the KOSPI’s market capitalization, have emerged as major new players in the stock market following their large-scale share buybacks. These buybacks are categorized under “other corporations” in market data, and some analysts suggest that “other corporations” have been acting as a “pillar of support” for the stock market by recording net purchases exceeding 5 trillion won over the past four days, thereby offsetting net selling by foreign investors.

According to the Korea Exchange on the 26th, “other corporations” made net purchases totaling 5.3765 trillion won in the KOSPI market over the four trading days from the 20th to the 25th. “Other corporations” recorded net purchases of over 1 trillion won daily: △1.0539 trillion won on the 20th, △1.0931 trillion won on the 21st, △1.6374 trillion won on the 24th, and △1.5920 trillion won on the 25th.

During the same period, foreign investors made net sales totaling 5.9496 trillion won, while retail investors made net purchases of 936.1 billion won and institutional investors made net sales of 360.4 billion won. It appears that other corporations effectively absorbed the majority of the “net selling” volume—over 5 trillion won—that foreign investors offloaded over the four-day period.

Behind this “trillion-won” level of net buying by “other corporations” lie large-scale share buybacks by SamsungElectronics and SK hynix. “Other corporations” refers to non-financial general corporations—that is, companies other than financial institutions—such as SK hynix, SamsungElectronics, and HyundaiMotor. Accordingly, when a company buys back its own shares on the open market, the volume is classified under “other corporations” as the buyer.

Previously, on the 19th, SK hynix’s board of directors decided to purchase 24.07 million shares of its own stock on the open market for 40.043 trillion won and subsequently cancel all of them. The purchase volume represents approximately 3.3% of the company’s issued shares, marking the largest share buyback and cancellation by a domestic listed company to date. The acquisition period runs from the 20th through November 19.

SamsungElectronics also decided on the 21st to purchase approximately 15 trillion won worth of treasury stock for employee compensation. SamsungElectronics plans to purchase approximately 53.29 million common shares on the open market, with the acquisition period running from August 24 to November 21.

Generally, the KOSPI tends to fall when selling pressure from a specific group—such as foreign investors, individual investors, or institutional investors—is particularly intense. However, some analysts suggest that SamsungElectronics and SK hynix—which together account for about 50% of the KOSPI’s market capitalization and effectively drive market trends—are serving as “pillars of support” for the stock market by buying back their own shares, thereby underpinning the stock price floor and countering foreign selling pressure.

In fact, on the 25th, the KOSPI fell 4.3% from the previous close early in the session due to massive net selling by foreign investors, but it recovered its losses thanks to gradual buying by other corporate entities and ultimately closed up 45.78 points (0.68%) at 6,742.74.

On that day, foreign investors net sold SK hynix and SamsungElectronics shares worth 1.9982 trillion won and 1.2566 trillion won, respectively; however, other institutional investors absorbed this selling pressure, allowing SK hynix to close up 0.42% at 1,678,000 won and SamsungElectronics to close flat at 257,000 won.

Of course, industry experts caution that this phenomenon cannot be generalized, as large-scale share buybacks do not necessarily prevent downward pressure on the stock market. Looking back at stock market history, more than half of the companies on the KOSPI that announced share buybacks saw their stock prices fall after the announcement in most cases.

A securities industry official pointed out, “Share buybacks themselves do not guarantee a rise in stock prices or prevent a decline,” adding, “If fundamental negative factors, such as deteriorating corporate earnings or a slowdown in the business cycle, outweigh the effects of share buybacks, stock prices can fall at any time.”

He continued, “However, given the overall weakening of market supply and demand following the July market downturn, the share buybacks by the newly emerged ‘Top 2 by Market Cap’ clearly represent a powerful force in the market,” adding, “It is worth watching whether the buying pressure from the Top 2 by Market Cap will act as a new variable in KOSPI supply and demand.”