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Photo courtesy of Samsung Electronics |
[Alpha Biz= Kim Jisun] As “other corporations” have emerged as a major buying force in the Korean stock market this year, market data show that Samsung Electronics is at the center of this trend. Analysts say Samsung’s massive share buyback—worth roughly KRW 2.7 trillion—has been a key driver behind the recent rise in the benchmark index.
According to the Korea Exchange on Jan. 27, other corporations posted net purchases of KRW 2.6209 trillion in the KOSPI market this year, the second-largest net buying volume after foreign investors, who bought KRW 3.2031 trillion worth of shares. In contrast, institutional investors and retail investors recorded net sales of KRW 304.1 billion and KRW 5.5341 trillion, respectively.
“Other corporations” refers to general corporate entities not classified as institutional investors. This category includes corporate treasury stock purchases, as well as trades by venture capital firms, private equity funds, and investment advisory companies. Although traditionally overlooked due to relatively small transaction volumes, the group has emerged as a major player this year.
Market participants believe that the bulk of net buying by other corporations stems from Samsung Electronics’ treasury share purchases. On Jan. 7, Samsung announced a KRW 2.5 trillion (18 million shares) buyback plan to provide performance-based compensation to employees. From Jan. 8 to Jan. 22, the company purchased 1.5 million shares per day for 11 consecutive trading sessions, followed by an additional 810,000 shares on Jan. 23. In total, Samsung acquired 17.31 million shares worth KRW 2.5023 trillion, completing the program early in just two weeks.
The buyback has significantly boosted Samsung’s share price, which has surged 33% year to date. Other corporations were also the largest net buyers of Samsung Electronics shares this month, purchasing approximately KRW 2.7 trillion worth. Over the same period, foreign investors and institutions sold KRW 2.1845 trillion and KRW 996.6 billion worth of Samsung shares, respectively, while retail investors bought KRW 450.3 billion.
Industry watchers expect capital inflows centered on Samsung Electronics to continue. Samsung Electronics closed the session up 4.87% at KRW 159,500. Kim Dong-won, an analyst at KB Securities, said, “With the rebound in memory prices gaining momentum, Samsung Electronics is likely to see a significant improvement in earnings,” and set a target price of KRW 240,000.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
