The domestic stock market next week is poised for significant fluctuations due to several major factors. Anticipation surrounding shareholder returns from semiconductor giants Samsung Electronics and SK Hynix, the Bank of Korea's interest rate decision, NVIDIA's earnings report, and the Jackson Hole economic policy symposium are all on the agenda.
Particularly noteworthy is SK Hynix's recent announcement of a large-scale stock buyback and cancellation, which could continue to bolster semiconductor stocks next week.
SK Hynix's 40 Trillion Won Stock Buyback: How Far Will the Shareholder Return Effect Reach?
On August 19, SK Hynix's board of directors decided to acquire and cancel approximately 40 trillion won worth of its own shares, marking the largest stock buyback and cancellation in the history of South Korean listed companies.
The company's new shareholder return policy states that it will return more than 50% of its free cash flow (FCF) from 2025 to 2027 to shareholders. Analysts believe this stock cancellation will reduce the number of shares outstanding, thereby increasing per-share value and earnings per share (EPS).
Following the announcement of its substantial shareholder return, SK Hynix's stock has shown strength, with Samsung Electronics also rising amid growing expectations for shareholder returns. On August 21, Samsung Electronics closed at 281,500 won, up 3.87% from the previous trading day, while SK Hynix finished at 1,730,000 won, up 2.31%.
Thus, a key point of interest for the domestic stock market next week will be whether Samsung Electronics and SK Hynix can continue to drive the KOSPI's upward trend.
Is Samsung Electronics Next? Anticipation Reflected in Stock Prices
With SK Hynix unveiling its unprecedented 40 trillion won shareholder return, market attention has naturally shifted to Samsung Electronics.
There are growing expectations that Samsung Electronics will hold a board meeting this month to announce a new shareholder return plan, including special dividends.
Currently, Samsung Electronics is utilizing 50% of its free cash flow for shareholder returns under its policy for 2024 to 2026. As this year marks the final year of the existing policy, market interest in a new shareholder return strategy has intensified.
Some reports suggest that the new shareholder return could reach around 100 trillion won. However, this remains speculative, and the actual scale and method will need to be confirmed by Samsung Electronics' official announcement.
Investors should focus not just on whether the news is positive or negative, but on how much of the anticipation has already been priced into the stock.
Samsung Electronics and SK Hynix have both seen significant short-term gains due to expectations of shareholder returns. If additional good news emerges, it could lead to profit-taking if the market has already priced in much of the positive sentiment.
Bank of Korea's Monetary Policy Meeting on August 27: Interest Rates as a Variable
Next week’s schedule is not solely focused on semiconductor stocks.
The Bank of Korea's Monetary Policy Committee will decide on interest rates on August 27. The current benchmark rate stands at 2.75%. The challenge is that market expectations are not uniform.
Some institutions predict that the benchmark rate will remain unchanged, while others foresee a potential 0.25 percentage point increase due to household debt and inflation concerns.
From an investor's perspective, understanding that expectations for rate cuts generally lead to a positive stock market, while concerns about rate hikes create pressure, is crucial.
Particularly, rising interest rates can be relatively burdensome for growth and technology stocks, so it will be important to observe how already surging semiconductor stocks react to the interest rate decision.
NVIDIA's Earnings and Jackson Hole: The U.S. as the Final Variable
Later next week, there will be events that could shake both domestic and international markets.
NVIDIA is set to announce its second-quarter earnings for the 2027 fiscal year on August 26. The company has officially confirmed the schedule for its earnings report and conference call.
NVIDIA's earnings are significant because they are seen as a signal that the enthusiasm for AI investment continues, which could positively influence semiconductor investment sentiment.
Conversely, if the results fall short of market expectations or if future projections weaken, it could negatively impact not only U.S. tech stocks but also domestic semiconductor stocks.
Will the Market Rise or Fall Next Week?
Based on the current situation, there is a slightly greater likelihood of an upward trend, but it is reasonable to expect considerable volatility next week.
SK Hynix's 40 trillion won stock buyback and cancellation is a rare and powerful shareholder return measure in the domestic market. Coupled with the anticipation of additional shareholder returns from Samsung Electronics, investor sentiment towards large-cap semiconductor stocks may revive.
However, given that Samsung Electronics and SK Hynix have already risen significantly in a short period, the possibility of profit-taking should also be considered.
Ultimately, the key question for the stock market next week will not be whether there is good news, but rather how much the good news exceeds market expectations.
If NVIDIA's earnings meet market expectations and the Bank of Korea's interest rate decision signals a more accommodative stance than feared, there is potential for an upward trend centered around semiconductor stocks.
Conversely, if NVIDIA's results or outlook disappoint or if concerns about interest rate hikes grow, profit-taking may occur, particularly among recently surging semiconductor stocks.
However, rather than definitively predicting the rise or fall of specific stocks, it is essential to keep an open mind regarding both the potential for further gains and the possibility of profit-taking among recently surging semiconductor stocks.
* This article has been translated by AI.
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