Share buybacks on SGX hit 35-month high in August

SINGAPORE – Share buybacks climbed to a 35-month-high in August as some 43.6 million shares worth $245.4 million were repurchased by as many as 30 companies, more than twice July’s buyback consideration of $109 million.

Last month’s value of share buybacks is also more than four times August 2017’s total consideration of $59.7 million, said bourse operator Singapore Exchange (SGX) in a SGX My Gateway report.

DBS Group Holdings topped the list of share buyback by value, scooping up 5.95 million of its own shares for $150.8 million, or roughly 61 per cent of the value of all share buybacks in August.

Other index stocks CapitaLand, UOB, OCBC Bank and City Developments rounded out the top five share buybacks by value. The five companies together accounted for about $230.2 million, or 93 per cent of August’s buybacks.

Companies buy back their own shares for a number of reasons, ranging from their shares being undervalued to a desire to improve financial ratios, such as earnings per share. They also take the opportunity when prices are low to buy shares that can be reissued to senior management as part of their pay package.

The Straits Times Index (STI) generated a three per cent price fall in August as trade tensions between the US and China continued to fester and emerging market currencies continued to weaken.

Nine companies started new buyback mandates in August. These included City Developments, Stamford Land Corporation, Singapore Shipping Corporation, Maxi-Cash Financial Services Corporation and Japan Foods Holding among others.

A similar number of stocks commenced buyback mandates last month.

HRnetGroup posted the largest buyback consideration by a non-index stock in August. The Singapore-headquartered recruitment agency, which has agencies across Asia, bought back 2.4 million shares for a consideration of $2.2 million.