[Anchor]

Following news of shareholder return policies from Samsung Electronics and SK Hynix, their stock prices sharply rebounded in a single day. Whether this is a short-term fluctuation or a recovery of an upward trend remains to be seen.

Reporter Min Gyeongho has the details.

[Reporter]

SK Hynix closed with a massive 12.7 percent surge.

A massive treasury stock buyback announcement was the decisive factor.

The market had previously estimated SK Hynix's total shareholder return for this year at around 40 trillion won to 60 trillion won, with about half, or 20 trillion won to 30 trillion won, expected to be used for share buybacks.

However, with the announcement of a 40 trillion won buyback, stock prices jumped significantly on expectations that the total shareholder return scale would also expand further.

Samsung Electronics also soared 9.49 percent on expectations that it will finalize a shareholder return policy on the scale of 100 trillion won as early as this month.

The market is fueling expectations for further gains based on the past shareholder return scales of the two companies.

Samsung Electronics previously allocated about 10 trillion won for shareholder returns when its stock price was around the 70,000 won level.

SK Hynix spent about 1 trillion won on shareholder returns when its stock price was around 100,000 won.

The reasoning is that if their shareholder return scales expand to 100 trillion won and 60 trillion won, their stock prices could potentially rise by a similar proportion.

Furthermore, the market consensus is that even though semiconductors are a cyclical industry, operating profits are already sufficiently secured at least through the year after next.

Therefore, the perception that large-scale shareholder returns will not end as a temporary gift but can be sustained is viewed positively for future trends.

[Interview / Kim Dong-won / Head of Research, KB Securities: Investors do not buy stocks simply because dividends are high when earnings are poor. It holds significant meaning that (Samsung Electronics and SK Hynix) simultaneously satisfy both investment merits.]

As the U.S. government announced plans to increase its scale of buybacks—repurchasing previously issued bonds—the resulting drop in bond yields also acted as a favorable factor, helping the Kospi close up 5.8 percent at 6,852.

(Photo: Yonhap News)
Reported by Lee Moo-jin | Video by Kim Jun-hee