With the Q3 preliminary earnings release date for Samsung Electronics on the 8th coinciding with the regular rebalancing of major domestic large-cap semiconductor ETFs (Exchange-Traded Funds) and an options expiration date, concerns have been raised that supply-demand volatility in the stock market could increase. As the 15th trillion won share buyback by Samsung Electronics is also set to conclude, forecasts suggest that stock prices will be driven by supply and demand regardless of strong performance.
According to financial investment industry sources including Mirae Asset Securities, Samsung Securities, and DS Investment & Securities on the 7th, the regular rebalancing of the "FnGuide Semiconductor TOP10 Index" and the "FnGuide AI Semiconductor TOP2 Plus Index (PR)" is expected to take place on the 8th.
ETFs tracking the FnGuide Semiconductor TOP10 Index include "TIGER Semiconductor TOP10" and "TIGER Semiconductor TOP10 Leverage." As of the previous day, their net asset values (AUM) were 10.6321 trillion won and 747 billion won, respectively. The net asset value of TIGER Semiconductor TOP10 is the fourth largest among domestic listed ETFs. For the FnGuide AI Semiconductor TOP2 Plus Index (PR), the corresponding ETF is "SOL AI Semiconductor TOP2 Plus," with a net asset value of 6.3 trillion won, ranking 13th among ETFs.
The regular revision dates for both indices are the first business day of the week following the futures and options expiration date in April and October. Domestic futures and options expiration dates fall on the second Thursday of each month, which is the 8th in October. Accordingly, the regular revision date for both indices is next Monday, the 12th. However, rebalancing trades are conducted on the business day immediately preceding the regular revision date; since Friday the 9th is a public holiday (Hangul Day), the process is expected to proceed on the 8th.
Lee Kyu-won, a researcher at DS Investment & Securities, stated, "ETF management companies conduct rebalancing trades on T-1 business day (where T is the regular revision date) unless otherwise specified, and trading closer to the closing price prevents tracking errors from occurring with the index."
The industry expects approximately 200 billion won worth of selling pressure to emerge during the weight adjustment process. Based on the review date for determining inclusion and exclusion stocks before rebalancing, Samsung Electronics accounts for 27.1% of TIGER Semiconductor TOP10, exceeding the per-stock inclusion limit of 25% by 2.1 percentage points. Two other ETFs also approach or slightly exceed their inclusion limits.
The overlap with the options expiration date is another variable affecting supply and demand. Samsung Electronics accounts for 30% of the market capitalization of the KOSPI 200 Index, the underlying asset for the major KOSPI 200 options product, as of this day. During options expiration, spot trading often accompanies the settlement or hedging of derivative positions, which can increase intraday supply-demand volatility.
Jeon Gyun and Shin Su-han, researchers at Samsung Securities, noted, "Because the rebalancing of FnGuide Semiconductor TOP indices right before the holiday overlaps with the options expiration date, it is necessary to be aware of increased price volatility due to supply-demand conflicts in the stock market on the 8th."
With the 15th trillion won share buyback by Samsung Electronics, which had been supporting the lower end of the index, appearing to have concluded on the 6th, concerns are emerging that a supply gap could arise in conjunction with ETF rebalancing and options expiration. According to financial information provider FnGuide, the consensus estimate for Samsung Electronics' Q3 operating profit is 106.6401 trillion won, marking the first time in history that quarterly operating profit is expected to surpass 100 trillion won. However, due to supply-side burdens, it is observed that the buying reaction may not be significant despite historically strong results.
A securities firm researcher who requested anonymity stated, "The memory semiconductor cycle is improving further, but since stock prices have surged significantly since the beginning of the year, foreign investors' portfolio allocation has become too large, meaning they need to sell even more." The researcher added, "Although stock prices have fallen and valuations are much cheaper, individual investors appear likely to focus on 'overhead supply' rather than considering valuations, and will probably sell immediately even if stock prices rise on good results."
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