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

According to the Korea Exchange on the 2nd, as of that day, SK hynix(000660)had purchased 6.5 million shares—27% of the planned 24.07 million shares. SamsungElectronics(005930)has also purchased 15.8 million shares, accounting for 29.65% of its planned purchase 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 4.0782 trillion won, while SK hynix has spent approximately 10.9414 trillion won. Considering that SamsungElectronics announced a plan to repurchase 15 trillion won worth of shares and SK hynix announced a plan for 40 trillion won—for a total of 55 trillion won—the two companies combined still have approximately 40 trillion won in purchasing capacity remaining.

The key question is how long this massive buying momentum can continue. SamsungElectronics’ planned 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 the recent purchase pace of approximately 1.98 million shares per day continues, the remaining shares could be fully purchased in about 19 trading days. SK hynix could purchase the remaining shares in about 27 trading days if it maintains a daily purchase pace of approximately 650,000 shares.

The securities industry is also placing 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, individual 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” made net purchases totaling 1.6505 trillion won, marking the 10th consecutive trading day of purchases exceeding 1 trillion won. The KOSPI plunged sharply early in the session but briefly 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 can have a supply-and-demand safety net 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 noted, “It is also a cause for concern that retail investors are selling to cut losses or break even, institutions 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” cushion disappears, the buying pressure needed to absorb those sales will weaken, potentially increasing supply-demand pressures on 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 regarding 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 holdings starting with large-cap stocks that offer high liquidity.

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) Chair Kevin Warsh, which have heightened concerns over a September interest rate hike, could also weigh on foreign capital flows.

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