Amid the new government's policy to strengthen the protection of minority shareholder rights, the number and scale of stock buybacks by major domestic listed corporations have significantly increased. This is viewed as corporations actively engaging in shareholder returns in line with the policy direction.
According to the Financial Supervisory Service's electronic disclosure system (Dart) on the 17th, from June 3, when the 21st presidential election was held, to the 14th of this month, the number of stock buyback decisions disclosed by KOSPI and KOSDAQ listed companies totaled 45. This marks a 50% increase compared to the same period last year (30 cases).
During this period, the number of shares being repurchased is 145.27 million, and the amount scheduled for buyback amounts to 5.8379 trillion won. Compared to the same period last year (40.76 million shares, 2.2122 trillion won), this represents an increase of 256% and 164%, respectively. In monetary terms, it has more than doubled in just one year.
By method of repurchase, there were 30 cases of repurchased shares that were previously acquired and held. However, there were also 15 cases where shares were newly acquired through on-market or off-market purchases or trust agreements for buyback. The total amount scheduled for these buybacks is 4.5839 trillion won, accounting for 78.5% of the total.
Looking at the size of buybacks by corporation, HMM led with 81.8 million shares (2.1432 trillion won). Following were Shinhan Financial Group (11.54 million shares, 800 billion won), KB Financial (5.72 million shares, 660 billion won), NAVER (1.58 million shares, 368.4 billion won), Kia (3.88 million shares, 345.2 billion won), and Hyundai Mobis (1.07 million shares, 317.2 billion won). The listed companies explained that the purpose of the buybacks is to "enhance shareholder value and expand shareholder return policies."
Generally, stock buybacks decrease the number of outstanding shares, which can lift share prices and enhance shareholder value. In Korea, however, concerns have been raised that corporations utilize buybacks not for reduction but as a means for controlling shareholder management rights. In response, discussions on mandating buybacks through amendments to corporate law have gained momentum in the political arena.
In the business community, there are concerns that they could become vulnerable to threats of management rights seizure by speculative capital. However, some argue that mandating stock buybacks is essential to resolve the chronic undervaluation of the Korean stock market.
The market interprets this expansion of buybacks as a "value-up (corporate value enhancement) message" in response to government policy direction. An Ji-sun, a researcher from Eugene Securities, stated, "Since last year, announcements of stock buybacks have continued mainly by Samsung Electronics and large-cap stocks, indicating that a value-up program has been underway. However, the recent relatively large announcements centered around financial groups can be viewed as a result of the current government's policy momentum."
An also noted that the stock buyback decisions could provide opportunities for investors, emphasizing that "since this is a short-term event that has an impact immediately after the announcement, it is necessary to closely monitor the disclosure status."
Meanwhile, as of August this year, KOSPI and KOSDAQ listed companies have disclosed 177 stock buyback decisions. The total number of shares scheduled for repurchase is 415.3 million, and the total buyback amount is 18.2854 trillion won.