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Tag: kosdaq

  • Samsung and SK Hynix Slump Drags Seoul Benchmark Down 3.12 per Cent

    Samsung and SK Hynix Slump Drags Seoul Benchmark Down 3.12 per Cent

    South Korea’s benchmark KOSPI index dropped 3.12 per cent on Monday as sharp declines in Samsung Electronics and SK hynix dragged down Seoul equities. The semiconductor sell-off erased gains from the previous two sessions, leaving Samsung tumbling 8.70 per cent and SK hynix down 3.41 per cent by the close.

    The benchmark index settled at 6,696.96 points, down 215.99 points from Friday after opening 0.46 per cent lower. Foreign institutional funds drove the retreat, offloading a net 3.69 trillion won ($2.67 billion) in shares, while domestic institutions sold 1.29 trillion won. Local retail buyers absorbed 3.32 trillion won of the selling pressure.

    Divergent Shareholder Return Strategies

    Investor disappointment centered on the stark contrast between the capital return programs announced by the two semiconductor giants. SK hynix revealed a plan last Wednesday to repurchase and cancel 40 trillion won of its own stock, alongside a pledge to return at least 50 per cent of its free cash flow over the next three years. The chipmaker immediately started buying roughly 650,000 shares a day, accounting for up to 15 per cent of its daily trading volume.

    Samsung took a different approach, winning board approval on Friday for a capital allocation package worth between 90 trillion and 110 trillion won this year. That total includes about 30 trillion won in cash payouts and regular third-quarter dividends. Traders reacted negatively to the lack of immediate share cancellations, dumping the stock after management deferred specific allocation mechanics.

    Retail Buyers Cushion Foreign Outflows

    Across regional tech capital, institutional funds increasingly reward immediate share retirements over cash dividends because equity cancellations permanently reduce share count. Samsung’s reliance on cash payouts left investors exposed to timing uncertainty while SK hynix locked in direct daily buying demand.

    Capital that fled Samsung found a temporary home in smaller technology names. The secondary Kosdaq index gained 1.42 per cent to close at 813.33 points as money rotated into secondary battery suppliers and electronic materials manufacturers. In foreign exchange trading, the Korean won ended onshore trade at 1,382.4 per US dollar, strengthening by 4.1 won.

    Samsung’s board of directors is scheduled to meet in late October to determine the final dividend allocation and exact cash distribution timetable for the remaining portion of its 110 trillion won plan.

  • Troubled Mr. Pizza heads for Kosdaq delisting

    Troubled Mr. Pizza heads for Kosdaq delisting

    Troubled pizza company MP Group may soon be delisted from the Kosdaq after nine years on the exchange. Korea Exchange announced Monday that a committee on corporate evaluation agreed to delist the company, which operates pizza franchise Mr. Pizza, from the secondary board. Another committee, which is specifically responsible for Kosdaq listings, will reach a final decision by Dec. 24 on whether to delist MP Group or grant it time to its improve performance.

    Chances are high that the MP Group will face delisting by the end of this month. The company had already been given 12 months last October to address issues of concern, but was unable to turn its finances around.

    MP Group recorded 11.14 billion won ($10.07 million) in net losses last year, according to the Financial Supervisory Service (FSS). The situation only improved somewhat this year, with the company reporting 1.04 billion won of net losses in the first three quarters of 2018.

    At the height of its popularity, Mr. Pizza was Korea’s largest pizza chain, with around 433 franchisees in 2014. Though the Mr. Pizza brand started off in Japan, it was in Korea where it became a huge success, riding a wave in the domestic pizza market.

    Jung Woo-hyun, a former chairman, introduced the first Mr. Pizza store in Korea in 1990 and eventually bought the Japanese parent in 1996. By August 2009, MP Group was listed on the Kosdaq.

    The pizza company’s affairs took a dramatic turn for the worse in 2016 when Jung made headlines for a series of alleged offenses, ranging from the physical assault of a security guard to fair-trade violations.

    As accusations continued to surface of Jung and the MP Group’s gapjil, or abuse of power, consumers turned their backs on the franchise. The reaction took a toll on MP Group’s profits, and the number of Mr. Pizza stores quickly dropped.

    The biggest blow came last July when Jung was arrested for embezzlement and breach of trust.