Kospi falls 1.24% as Samsung disappoints on shareholder returns

Korean shares dropped 1.24 percent Thursday following Samsung Electronics' third quarter earnings that slightly missed expectations and disappointed investors by providing no updates on its shareholder-return plan. The local currency strengthened against the dollar.

The Kospi lost 74.78 points to close at 5,937.66, after rising as high as 6,100.11. 

On Wednesday, the Kospi surged by more than 6 percent, led by a rally in chipmakers after SK hynix reported record quarterly earnings and announced additional shareholder returns.

The index opened slightly higher, tracking overnight gains on Wall Street after the Federal Reserve held its benchmark interest rate steady at 3.75 to 4 percent.

The market turned lower shortly before 10 a.m., following the release of Samsung's third quarter earnings, which fell slightly short of analysts' expectations.

The world's largest memory chipmaker reported a record third quarter operating profit of 107.44 trillion won ($80.3 billion), up 783.1 percent from a year earlier, while revenue surged 126.9 percent to 195.3 trillion won, on robust AI-driven chip demand.

Investor sentiment was also dampened by a lack of details on the company's shareholder-return plan, despite expectations of additional dividends.

"Investor sentiment weakened as the company did not present a detailed shareholder-return plan," Lee Kyung-min, an analyst at Daishin Securities, said.

He estimated that Samsung's total shareholder returns for 2026 would amount to 90 trillion won to 110 trillion won. Of that, 35 trillion won had already been planned or distributed, while details of the remaining 55 trillion won to 75 trillion won were not disclosed.

Trade volume was light at 279.7 million shares worth 24.9 trillion won, with advancers outnumbering decliners 593 to 270.

Foreigners and individuals bought a net 76.2 billion won and 32 billion won, respectively, while institutions sold a net 446.9 billion won.

Market heavyweights closed mixed.

Samsung Electronics shed 4.13 percent to 232,000 won, after opening higher, while its chip rival SK hynix gained 2.62 percent to 1.5 million won.

Battery maker LG Energy Solution plunged 8.6 percent to 356,000 won after LG Chem, its largest shareholder, decided to sell a large stake in the company.

SK Square, the parent firm of SK hynix, advanced 3.47 percent to 953,000 won while Samsung Electro-Mechanics, an electronics component affiliate of Samsung Electronics, fell 1 percent to 1.3 million won.

The local currency strengthened 0.9 won from the previous session to trade at 1,336.8 against the greenback at 3:30 p.m. 

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 3.3 basis points to 3.766, and the return on the benchmark five-year government bonds went down 2.6 basis points to 3.923.

Yonhap