High-net-worth investors with average account balances exceeding ₩1 billion (approximately $730,000) concentrated their purchases on Samsung Electronics preferred shares and SK Hynix last week, resuming their bets on South Korea’s semiconductor “top two.” The combination of special dividends and share buybacks appears to have driven buying momentum into large-cap semiconductor stocks.
According to Korea Investment & Securities on the 30th, clients with balances of ₩1 billion or more net purchased ₩36.82 billion (approximately $26.8 million) worth of Samsung Electronics preferred shares from the 21st to the 27th. When Samsung Electronics unveiled its ₩30 trillion (approximately $21.9 billion) special dividend plan on the 21st, funds seeking dividend income flowed into preferred shares. Samsung Securities estimates Samsung Electronics’ annual dividend yield at 3.9% for common shares and 5.3% for preferred shares this year.
SK Hynix ranked second with net purchases of ₩12.02 billion (approximately $8.8 million). The company has been buying back approximately 650,000 shares per trading day on the open market since the 20th, following its announcement of a large-scale shareholder return program. Additionally, Nvidia’s second-quarter earnings released on the 26th (local time), which exceeded market expectations, is cited as another factor boosting overall semiconductor investment sentiment. SK Square also recorded net purchases of ₩4.35 billion (approximately $3.2 million), ranking seventh.
Outside the semiconductor sector, Silicon2, a K-beauty distribution platform, ranked third in net purchases at ₩6.75 billion (approximately $4.9 million). The resolution of overhang concerns after Glenwood Credit disposed of its entire 6.72% stake through a block deal, combined with growing overseas expansion expectations following a ₩300 billion (approximately $218.7 million) investment from global private equity firm CVC Capital on the 18th, appears to have driven the buying.
In the pharmaceutical and biotech sector, Samsung Epis Holdings (₩5.36 billion) and Alteogen (₩5.07 billion) were among the top net purchases. Among auto parts stocks, Hyundai Mobis (₩4.35 billion) and Hyundai AutoEver (₩2.27 billion) attracted high-net-worth investor interest.
This buying by individual high-net-worth investors, combined with large-scale share buybacks by other corporate entities classified as institutional investors, is providing downside support for the KOSPI. According to Korea Exchange data, other corporate entities bought approximately ₩1 trillion (approximately $729.1 million) worth of shares daily for seven consecutive trading days from the 20th to the 28th. Their average daily net purchases, which stood at around ₩18.7 billion (approximately $13.6 million) earlier this month, surged after the 20th.
Other corporate entities’ cumulative net purchases on the KOSPI reached ₩10.19 trillion (approximately $7.4 billion) during this period, with Samsung Electronics and SK Hynix buyback volumes at the core. From the 20th to the 28th, other corporate entities net bought ₩2.47 trillion (approximately $1.8 billion) of Samsung Electronics shares, while retail investors (-₩140.1 billion), foreigners (-₩948.4 billion), and institutions (-₩1.38 trillion) all net sold. For SK Hynix, other corporate entities alone bought ₩7.62 trillion (approximately $5.6 billion).
Future buying capacity remains ample. Samsung Electronics plans to acquire approximately ₩15 trillion (approximately $10.9 billion) in treasury shares through open market purchases from the 24th of this month to November 21st. SK Hynix also plans to buy back ₩40 trillion (approximately $29.2 billion) worth of shares from August 20th to November 19th. Given that other corporate entities’ cumulative net purchases of Samsung Electronics and SK Hynix total ₩10.09 trillion (approximately $7.4 billion) as of today, approximately ₩45 trillion (approximately $32.8 billion) in additional buying capacity remains.
However, despite the massive buying, the KOSPI has struggled to reclaim the 7,000 level. Even as Nvidia’s strong earnings eased AI peak-out concerns, the KOSPI slid to the 6,700 level the previous day, with Samsung Electronics and SK Hynix closing down 3.38% and 4.45%, respectively. While share buybacks are providing downside support, observers note that it will take time for them to translate into upward momentum.