“Samsung Electronics shareholders, take note of the 8th”: Goldman Sachs warns of volatility as selling floods in

[Financial News] Goldman Sachs, a global investment bank (IB), forecast increased volatility in Samsung Electronics’ share price on the 8th, the day the company is due to announce its preliminary third-quarter results. Several factors—including exchange-traded fund (ETF) rebalancing, options expiry and the end of its share buyback program—will coincide that day.

Goldman Sachs’ FICC and Equities divisions said in a report titled “Samsung Electronics: What to Watch Ahead of October 8,” released on the 6th, that several supply-and-demand events are scheduled to occur simultaneously on the 8th.
ETF rebalancing is cited as the first event. With Samsung Electronics’ weighting in ETFs nearing the upper limit, seven semiconductor ETFs with total assets under management (AUM) of about 19 trillion won will rebalance that day. Goldman Sachs expects the process to generate mechanical selling in Samsung Electronics.
It also forecast that some of the funds flowing out of Samsung Electronics could move into semiconductor stocks such as SK hynix, SK Square, Isu Petasys, WONIK IPS Co., Ltd. and Hanmi Semiconductor. It further raised the possibility that the effect of share buybacks—which had supported Samsung Electronics’ share price—could weaken, as options expiry also falls on the same day.

Earnings expectations were also lowered due to the won’s strength. Taking into account that the average won-dollar exchange rate for the third quarter was 1,418 won, below the previous assumption of 1,460 won, Goldman Sachs cut its forecast for Samsung Electronics’ third-quarter operating profit by about 5%, from 112 trillion won to 106 trillion won. The market consensus for the company’s third-quarter operating profit is also forecast to be around 105.5 trillion won, down about 114 trillion won from August.
Goldman Sachs assessed the semiconductor industry’s underlying conditions as robust. It said the fundamentals of DRAM and NAND are sound, with growth in high-bandwidth memory (HBM) expected to stand out in particular. As HBM4 shipments ramp up, HBM bit growth—the increase in shipments measured in bits—is forecast to rise by about 50% quarter on quarter.
Recent consecutive net selling by foreign investors was also cited as a factor that could heighten short-term volatility. Trading flows from the 1st of last month through the 2nd of this month show that individual investors net sold $7.5 billion, foreign investors $3.4 billion and pension funds $300 million. By contrast, share buybacks accounted for $8.5 billion in net buying over the same period, while domestic institutions accounted for $2.5 billion.
Goldman Sachs therefore forecast that, as Samsung Electronics’ preliminary results announcement coincides with mechanical selling from ETF rebalancing, options expiry and the end of share buybacks, whether foreign buying returns will be a key point to watch for the stock’s future performance.
[email protected] Kim Hee-seon Reporter