139 Acquisition Disclosures This Year
Stock Price Boosts Increased Last Year Due to COVID-19
Necessity Weakened This Year, Halved Decrease
[Asia Economy Reporter Song Hwajeong] This year, the number of share repurchases by listed companies has significantly decreased compared to the previous year. While many listed companies engaged in share repurchases to defend their stock prices during the sharp market decline immediately after the outbreak of COVID-19 last year, this year’s strong stock market performance is believed to have naturally reduced such activities.
According to the Korea Exchange’s corporate disclosure channel (KIND) on the 21st, the number of share repurchase disclosures by listed companies this year was 139, nearly half of last year’s 247. The KOSPI saw a decrease from 117 cases last year to 68 this year, and the KOSDAQ also dropped from 119 to 68 cases.
The sharp decline in share repurchase cases this year compared to last year is attributed to the impact of COVID-19. Last year, share repurchase disclosures on the KOSPI were 95 cases in the first half and only 22 in the second half. The KOSDAQ also had 103 cases in the first half and 16 in the second half. These were especially concentrated in March and April, when the stock market experienced a steep drop due to COVID-19. It appears that listed companies actively engaged in share repurchases to boost stock prices during the COVID-19 market crash, leading to a significant increase last year. In contrast, this year’s stock market has shown strength, hitting record highs from the beginning of the year, reducing the relative need for stock price support and thus lowering share repurchases.
Although stock prices did not show a sharp decline like last year, listed companies have continued to repurchase shares steadily from the perspective of shareholder returns. Among KOSPI-listed companies, NHN, ShinYoung Securities, and Kyungbang repurchased shares four times this year, while Mirae Asset Securities and Mirae Asset Life Insurance each acquired shares twice.
Share repurchases generally appear to have a positive effect on stock prices. Looking at the stock prices of companies that repurchased shares four times this year, NHN’s stock price rose 23.19% since the beginning of the year, ShinYoung Securities increased by 13.28%, and Kyungbang rose by 8.87%.
As the year-end approaches, corporate executives are also actively repurchasing shares. Sohn Tae-seung, Chairman of Woori Financial Group, purchased 5,000 shares on the market earlier this month. Kang Seong-su, CEO of Hanwha General Insurance, also bought 20,000 shares last month.
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