KB News Desk
SK hynix shares surged as much as 14 percent Thursday after the chipmaker unveiled a 40 trillion won ($28.7 billion) share buyback and cancellation plan, a move it said would mark the largest treasury-share cancellation by a listed Korean company.
The rebound helped lift the Kospi and spilled over to rival Samsung Electronics, which gained nearly 10 percent in morning trading on expectations that it could also step up shareholder returns.
SK hynix said after Wednesday’s market close that it would buy back and cancel up to 24.07 million shares, equivalent to about 3.3 percent of its outstanding stock. The company also pledged to return at least 50 percent of cumulative free cash flow over the next three years under a revamped shareholder-return policy.
The announcement sent SK hynix back above 1.7 million won during intraday trading Thursday, reversing much of its more than 9 percent plunge a day earlier.
An even bigger winner, however, was SK Securities, which was selected to broker the record-sized buyback.
SK Securities shot to its daily limit of 2,810 won immediately after the market opened, up 29.79 percent, while its preferred shares also hit the limit, rising 29.88 percent to 5,260 won.
Investors bet the brokerage could earn substantial fees from handling what is set to be the largest share repurchase transaction ever carried out by a Korean listed company.
