[Edaily Reporter Shin Ha-yeon ] The large-scale share buybacks by SamsungElectronics(005930)and SK hynix(000660), which have served as a pillar of supply and demand in the domestic stock market, are entering their final stages. If the current pace continues, the buybacks are expected to conclude around the middle of next month—earlier than the originally scheduled date in November. With no clear buyers in sight, market attention is focused on the supply-demand gap that is expected to emerge once the two companies’ buybacks are completed.

According to the Korea Exchange’s corporate disclosure channel on the 20th, SamsungElectronics purchased 39.8 million shares of its own stock over 20 trading days starting on the 24th of last month. This represents 74.69% of the total planned volume of 53,285,968 shares. The cumulative purchase amount totaled 10.3078 trillion won.

SK hynix also purchased 14.15 million shares of its own stock over 22 trading days starting on the 20th of last month. This represents 58.79% of the total planned purchase volume of 24.07 million shares, with a cumulative purchase amount of 24.39 trillion won.

The combined cumulative value of the two companies’ share buybacks totals 34.6978 trillion won. SamsungElectronics had planned to continue its share buyback until November 21, and SK hynix until November 19; however, at the current pace, the completion dates could be brought forward by about a month.

SamsungElectronics is purchasing an average of approximately 2 million shares per day. Considering that 13,485,968 shares remain, it is estimated that the company will be able to purchase the entire planned volume within about 6 to 7 trading days.

SK hynix’s average daily purchase volume is approximately 650,000 shares. If the remaining 9,920,000 shares are purchased at the same pace, it is expected to take about 15 to 16 trading days. Taking into account market holidays such as the Chuseok holiday, the substitute holiday for National Foundation Day, and Hangeul Day, the two companies’ share buybacks are expected to wrap up as early as mid-next month.

The two companies’ share buybacks have helped support the bottom of the domestic stock market despite domestic and international headwinds. Although concerns persisted—including high oil prices and interest rates due to the prolonged war, policy rate hikes by major central banks, and fears of a slowdown in the artificial intelligence (AI) industry—it is widely believed that the large-scale share buybacks prevented a sharp decline in the stock prices of major semiconductor companies.

In fact, the “side car” mechanism has not been triggered in the KOSPI market since the 20th of last month. While regulations imposed by financial authorities on single-stock leveraged exchange-traded funds (ETFs) played a role, the sustained share buybacks by SamsungElectronics and SK hynix are also seen as having contributed to reducing index volatility.

In particular, SamsungElectronics and SK hynix account for a combined weight of over 50% of the KOSPI’s market capitalization. Given this structure, the funds flowing into these two stocks through share buybacks inevitably have a significant impact not only on individual stock prices but also on the overall direction and volatility of the KOSPI.

Lee Jeong-bin, an analyst at Shinhan Investment Securities, stated, “We view the expansion of shareholder returns as a factor that cushions the downside for stock prices,” adding that share buybacks by non-financial companies, in particular, “have shown relatively strong performance and low downside beta during market downturns.”

The issue lies in what happens after the buybacks conclude. With the KOSPI recently stuck in a trading range and trading volume declining, no clear supply-and-demand drivers capable of leading the market have emerged aside from other corporations buying back their own shares. This is why concerns are rising that a short-term supply-and-demand vacuum could occur once SamsungElectronics and SK hynix both conclude their buybacks simultaneously.

Consequently, market attention is turning to whether foreign investors will return. However, external conditions are not favorable for foreign investors to expand their investments in risky assets, such as emerging market stocks. As the war drags on, Brent crude oil prices have surpassed $100 per barrel, and the yield on 10-year U.S. Treasury bonds is approaching 5 percent. The won-dollar exchange rate has also risen again, surpassing 1,385 won per dollar.

The third-quarter earnings season, which begins next month, could also serve as a catalyst for a shift in market sentiment. If major companies, including semiconductor firms, report solid earnings, this could encourage foreign investors to return to the domestic stock market.

The earnings report from U.S.-based Micron Technology is cited as a leading indicator for the third-quarter results of SamsungElectronics and SK hynix. Micron, often referred to as the “barometer” of the semiconductor industry, is scheduled to announce its earnings after the Chuseok holiday.

Additional shareholder return policies from both companies are also drawing attention. If dividends or further share buybacks and cancellations continue even after the completion of their current share buyback programs, this could partially alleviate concerns about a supply-demand gap.

Lee Jae-won, an analyst at Yuanta Securities Korea, said, “SamsungElectronics is scheduled to pay a cash dividend of approximately 30 trillion won in the third quarter, and SK hynix has also signaled that it will announce additional shareholder return policies following its 40 trillion won share buyback and cancellation program,” adding, “It’s time to prepare for SamsungElectronics’ preliminary third-quarter earnings in early October.”