A 40 Trillion Won Buyback Is Holding Up the KOSPI, and the KOSDAQ Is Paying For It

The KOSPI opened down 1.35% at 6,759.95 on the 21st on a renewed rise in long-term U.S. Treasury yields, then closed up 0.88% at 6,912.95, a gain of 60.37 points, after Samsung Electronics and SK hynix reversed its direction ^[1][2]. The KOSDAQ went the other way, closing at 801.94, down 4.63% ^[3]. A 5.51 percentage point spread between the two boards in one session ^[1] tells you this was not a risk-on day; it was a capital-returns day in two tickers.

The mechanism is unusually literal. SK hynix has decided to buy back and cancel 40 trillion won, or $27.7 billion, of its own shares ^[4], and the paper reports that buying through "other corporate entities" driven by SK hynix's on-market repurchases helped lift the index ^[5]. Lee Kyung-min of Daishin Securities said the strength came from the impact of those on-market buybacks, with Samsung's shareholder-return momentum added on top ^[6]. The flow data supports the plumbing story: on the main board institutions bought a net 207.8 billion won while foreign investors sold 423 billion and retail investors sold 862.4 billion ^[7]. Those three categories net to 1.08 trillion won of selling ^[2], which someone else absorbed. Foreigners were net sellers in cash but bought more than 1 trillion won of KOSPI 200 futures ^[8].

The rest was anticipation. Samsung Electronics closed at 281,500 won, up 3.87%, and SK hynix at 1.73 million won, up 2.31%, on expectations of a large Samsung payout plan ^[9]; Bloomberg reported Samsung could announce a package of 90 trillion to 110 trillion won that day ^[10]. Taken with SK hynix, that is 130 trillion to 150 trillion won of promised returns from two companies ^[3]. The bid spread to anything holding Samsung paper: preferred shares up 8.26%, Samsung Life Insurance up 10.61%, Samsung C&T up 5.75% ^[11]. Banks got bargain-hunting money, KB up 2.69% and Shinhan up 2.97% ^[12]. What did not get money was last month's story: Hanwha Aerospace fell 7.03% and HD Hyundai Heavy Industries 4.73% on profit-taking ^[13].

On the KOSDAQ the same rotation was violent. A sell-side sidecar halted program sell orders for five minutes early in the session, the 32nd sidecar of the year on that board and the 14th on the sell side, arriving 16 trading days after the last one ^[14]. Biotech names that had surged the previous day on Moderna-related news gave it back, with LigaChem Biosciences down 13.23% and ABL Bio down 8.85% ^[15]; semiconductor materials and equipment names sold off too, Ecopro BM down 7.45% and Wonik IPS down 5.27% ^[16]. Foreign and institutional investors sold a net 734 billion won combined ^[4] while retail bought 728.5 billion ^[17]. Retail sold the large caps that rose and bought the small caps that fell ^[5].

Two things to watch. First, whether Samsung's plan landed at the size Bloomberg floated, because the index has already been marked to the rumour ^[10][9]. Second, the duration of the SK hynix bid: 40 trillion won is finite, and a market whose direction reverses on one issuer's repurchase desk ^[5][6] has borrowed support rather than earned it. The 10-year Treasury yield was back around 4.70% overnight and did not go away ^[18].