[Edaily Reporter Kim Kyung-eun ] As SamsungElectronics and SK hynix’s share buybacks have established themselves as a supply-and-demand buffer propping up the KOSPI, attention is turning to whether this effect will last. This is because, at the current pace of buybacks, the program is likely to conclude in October—about a month earlier than the officially announced end date in November. Concerns are emerging that if foreign selling pressure does not subside, a supply-demand gap following the conclusion of the buyback program could weigh on the stock market.

According to the Korea Exchange on the 2nd, as of the previous day, SK hynix(000660)had purchased 5.85 million shares—24.3% of the planned 24.07 million shares. SamsungElectronics(005930)has also purchased 13.8 million shares, accounting for 25.9% of its planned volume of 53,285,968 shares. Since beginning their buybacks on the 20th and 24th of last month, respectively, both companies have used up about a quarter of their planned volumes in less than 10 trading days.

In terms of transaction value, SamsungElectronics has spent approximately 3.5733 trillion won, while SK hynix has spent approximately 9.088 trillion won. Considering that SamsungElectronics announced a share buyback plan of 15 trillion won and SK hynix announced one of 40 trillion won—for a combined total of 55 trillion won—the two companies still have a combined purchasing capacity of approximately 42.3 trillion won remaining.

The key question is how long this massive buying momentum can continue. SamsungElectronics’ scheduled buyback period runs through November 21, while SK hynix’s runs through November 19. However, at the current pace, the actual completion dates could be brought forward by more than a month—to October 8 and October 16, respectively. In the case of SamsungElectronics, assuming it maintains its recent purchase pace of about 2 million shares per day, the remaining volume (39,485,968 shares) could be fully acquired in about 20 trading days. SK hynix could purchase the remaining volume in about 29 trading days if it maintains a daily purchase rate of approximately 650,000 shares.

The securities industry is also placing significant weight on the possibility that the supply-demand stabilizing effect resulting from share buybacks will continue for about another month. In fact, following the 31st of last month, retail investors, foreign investors, and institutions engaged in unusual simultaneous net selling for two consecutive days through the 1st of this month, and “other corporations” absorbed most of this volume through share buybacks.

On this day as well, “other corporations” recorded net purchases of 1.6505 trillion won, marking the 10th consecutive trading day of purchases in the 1 trillion won range. The KOSPI plunged sharply early in the session but later narrowed its losses; however, it closed down 3.99% amid selling by foreign and institutional investors totaling 4 trillion won. Ultimately, the consensus view in the securities industry is that while share buybacks serve to support the index’s bottom, they are not a catalyst capable of driving an uptrend.

Han Ji-young, an analyst at KIWOOM Securities, said, “Assuming the current pace of share buybacks is maintained, it is positive that we have a safety net for supply and demand for about a month until mid-October, before the third-quarter earnings season begins,” but added, “There are limits to how much share buybacks can flexibly drive up stock prices.” She further pointed out, “It is also a cause for concern that retail investors are selling to cut losses or break even, institutional investors are adjusting their positions, and foreign investors are taking profits and hedging against macroeconomic risks—each for their own reasons.”

The real issue lies in the period after the share buyback program ends. If foreign investors continue to sell even after the “other corporate entities” buffer disappears, buying pressure to absorb these sales will weaken, potentially increasing supply-demand pressures in the stock market. Whether foreign selling pressure can subside before the share buyback program concludes is seen as the key to future KOSPI supply and demand dynamics.

Currently, it is interpreted that foreign investors are taking profits, particularly in large-cap semiconductor stocks—which have seen significant gains this year—amid growing caution over U.S. monetary policy and uncertainty surrounding the sustainability of artificial intelligence (AI) investments. In particular, analysts note that when risk-aversion sentiment intensifies, foreign investors tend to liquidate highly liquid large-cap stocks first.

The securities industry expects factors constraining foreign capital inflows into the domestic stock market to persist for the time being. U.S. monetary policy, long-term interest rates, and the won-dollar exchange rate are cited as key variables that will influence foreign capital flows. Recent hawkish remarks by U.S. Federal Reserve (Fed) Chairman Kevin Warsh, which have heightened concerns about a September rate hike, could also weigh on foreign capital flows.

Noh Dong-gil, an analyst at Shinhan Investment Securities, explained, “As the return on AI investments and the cash burden on hyperscalers have emerged as points of contention, the valuations of global leading semiconductor stocks have declined,” adding, “When foreign investors seek to reduce their exposure to Korean stocks, the two semiconductor giants—SamsungElectronics and SK hynix—are the stocks they can liquidate the fastest.” He further predicted, “If global semiconductor stocks decline again, share buybacks may remain limited to defensive demand; however, once volatility subsides and foreign selling stops, the remaining purchase volume will boost the momentum of a rebound.”