Samsung Electronics Reclaims Market-Cap Crown on $65 Billion Buyback Hopes

Common Shares Jump 10% as Market Value Reaches $1.44 Trillion

Samsung C&T, Samsung Life Also Rebound

Samsung Electronics reclaimed its title as South Korea’s most valuable company from SK Hynix just two days after losing it, as expectations grew for a roughly $65.2 billion share buyback program. Other Samsung group stocks, including Samsung C&T and Samsung Biologics, also rose and helped lead a rebound in the Kospi.

Samsung Electronics closed 9.84% higher at 340,500 won on June 24, recovering much of the previous session’s 12.31% slide. SK Hynix, which had fallen 12.47% a day earlier, edged up 0.98%. Based on the closing price, Samsung Electronics’ common shares were valued at 1,990.6578 trillion won, or about $1.44 trillion, overtaking SK Hynix at 1,838.7721 trillion won, or about $1.33 trillion. Including preferred shares, which rose 5.43%, Samsung Electronics’ total market capitalization reached 2,161.964 trillion won, or about $1.57 trillion.

The stock gained on expectations for a large buyback. Industry officials say Samsung Electronics is preparing to soon announce a plan to repurchase 89 trillion won, or about $64.5 billion, equivalent to roughly 290 million shares, over three years. That would be three times the total value of its buybacks over the past decade and the largest such program in the company’s history. The plan would follow a special management performance bonus agreed with labor unions last month and performance-linked stock compensation, or PSU, introduced last year. Samsung currently holds about 80 million treasury shares for compensation and would need to buy the rest in the market.

Samsung affiliates also finished higher, adding momentum to the Kospi’s rebound. Samsung C&T and Samsung Life Insurance, which own stakes in Samsung Electronics, rose 5.82% and 1.88%, respectively, on June 24. Samsung Biologics, which is participating in Bio USA in San Diego, also jumped 8.8%.

Supported by gains in large-cap stocks, the Kospi reclaimed the 8,400 level after one day. The index, which had tumbled from 9,000 to the 8,200 range a day earlier, closed up 3.26% at 8,471.02 after swinging between gains and losses.

Lee Sun-a, Hankyung.com reporter suna@hankyung.com