Key facts
- Samsung Electronics announced a shareholder return plan of 90 trillion to 110 trillion won.
- The plan commits to returning 50% of free cash flow from 2024-2026.
- A cash dividend of approximately 30 trillion won is planned for the third quarter.
- Samsung Electronics shares fell over 8% following the announcement.
- The company's plan was seen as smaller than anticipated with less detail on buybacks compared to SK Hynix.
Seoul stocks closed sharply lower on Monday as disappointment over Samsung Electronics' shareholder return plan triggered a sell-off in semiconductors. The benchmark Korea Composite Stock Price Index (KOSPI) dipped 215.99 points, or 3.12 percent, to 6,696.96.
Large-cap tech shares came under selling pressure from foreign and institutional investors. Lee Kyoung-min, an analyst from Daishin Securities, stated that the KOSPI was weighed down by disappointment over Samsung Electronics' shareholder return plan announced last week, with other Samsung affiliates losing ground.
On Friday, Samsung Electronics announced a shareholder return plan worth between 90 trillion won (US$65.2 billion) to 110 trillion won. The company plans to give out cash dividends of around 30 trillion won in the third quarter, with exact size and structure to be finalized at an October board meeting. Investors were reportedly let down by the company's failure to provide details on a possible stock buyback.
Traders are also monitoring external factors, including the upcoming earnings release from chip giant Nvidia and the latest economic readings from the United States, which saw its strongest growth in its service sector in nearly two years in August.