Samsung Electronics' Share Buyback Raises Expectations for Preferred Stock Revaluation

Samsung Electronics is pushing forward with a large-scale shareholder return program, increasing the likelihood of a revaluation of domestic preferred stocks. If Samsung actively purchases preferred stocks at lower prices during its share buyback process, the price gap between common and preferred stocks is expected to narrow. Currently, Samsung's preferred stocks are trading at about 26% lower than common stocks, with the discount rate having once shrunk to 37%, yet it remains at its largest level in over a decade. Hyundai Motor has also announced a share buyback that includes preferred stocks, drawing attention to the potential spread of preferred stock buybacks across domestic companies. Domestic preferred stocks are trading at an average discount rate of 45%, a price difference caused by factors such as the absence of voting rights and low trading volumes. Experts analyze that Samsung's share buyback could trigger a reduction in the discount on preferred stocks. Coupled with the government's efforts to improve corporate governance, the possibility of a revaluation of preferred stock values is increasing.

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