Share buybacks on SGX hit 35-month high in August

DBS Group topped the list of buybacks 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 last month.
DBS Group topped the list of buybacks 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 last month.PHOTO: BLOOMBERG

Cash-rich firms took advantage of softer market to scoop up stocks, with DBS topping list

Share buybacks hit a 35-month-high last month as companies flush with cash took advantage of a softer stock market.

Around 43.6 million shares worth $245.4 million were repurchased by about 30 firms, more than twice July's level of $109 million.

Last month's value of share buybacks was also more than four times the $59.7 million shelled out in the same month last year, according to a Singapore Exchange (SGX) My Gateway report.

DBS Group Holdings topped the list of buybacks 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 last month.

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 last month's buybacks.

Companies buy back their own shares for a number of reasons, ranging from their stock 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 pay packages.

The Straits Times Index fell 3 per cent last month as trade tensions between the United States and China remained volatile and emerging market currencies continued to weaken.

Nine companies started new buyback mandates last month, including City Developments, Stamford Land Corporation, Singapore Shipping Corporation, Maxi-Cash Financial Services Corporation and Japan Foods Holding.

HRnetGroup posted the largest buyback outlay by a non-index stock last month. The Singapore-headquartered recruitment agency, which has offices across Asia, bought back 2.4 million shares for $2.2 million.

A version of this article appeared in the print edition of The Straits Times on September 05, 2018, with the headline 'Share buybacks on SGX hit 35-month high in August'. Print Edition | Subscribe