- In May, 18 SGX primary-listed stocks bought back shares for a total consideration of S$15 million, lower than the S$36 million in consideration for April 2020, and seasonally lower than the S$123 million buyback consideration reported in May 2019.
- ST Engineering led the May buyback consideration tally, buying back 2 million shares on a new mandate which began on 15 May. The shares were bought back at an average price of S$3.15 per share, with a total consideration of S$6.3 million.
- Sing Press Hldgs and Global Investments also led the May consideration tally. Global Investments has now bought back 7.8% of its issued shares (excluding treasury shares) on the current mandate, and has seen its share price decline 2.8% over the first five months of 2020.
Total share buyback consideration for month of May totaled S$14.9 million, down from S$36.3 million in April (click here for more) and S$501.5 million in March (click here for more). This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$650 million for the first five months of 2020, up from S$590 million in consideration for the entire calendar year of 2019.
The Straits Times Index (STI) declined 4.3% in April, to 2510.75, as its 10-day historical volatility remained between 22% and 14% for the month, ending at 18%. For context, back in the month of March, STI 10-day historical volatility reached as high as 80%.
Dividend distributions in the month of May by heavyweight constituents, such as DBS Group Holdings and Oversea-Chinese Banking Corp, boost May’s total return to a decline of 3.3%, This brought the STI’s decline in total return for the first five months of 2020 to 20.8%, with the FTSE ASEAN All-Share Index declining 19.5%.
Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$387 million over the first five months of 2020 as investors accumulated units amidst the market declines. The S$387 million was is up 120% from the total net creations of S$176 million for the entire 2019 year.
May 2020 Buyback Consideration Led by ST Engineering, SPH & Global Investments
A total of 18 primary-listed stocks conducted buybacks in Singapore in May, down from 39 in April, down from 65 in March, and similar to 17 stocks in February.
Global Investments’ current mandate has now seen the company buy back 7.76% of its issued shares excluding treasury shares as of the date of the approved buy back resolution on 25 April 2019. The company has seen its share price decline by 2.8% in the first five months of 2020, and has also proposed the renewal of the Share Buyback Mandate at the AGM, currently scheduled by ways of electronic means, on 19 June 2020 at 4.00pm.
The table below summarises the buyback considerations in May 2020. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions. The two companies that commenced new buyback mandates, Singapore Technologies Engineering and The Straits Trading Company are in bold.
|Primary-listed Stocks that conducted Share Buybacks in May 2020||Number of Shares/units Authorised for Purchase in Current Mandate||Total Number of Shares/units Purchased in May 2020||Total Buyback Consideration (including stamp duties, clearing changes etc.) paid or payable for the shares in May 2020||Average Share Price Paid (including stamp duties, clearing changes etc.) in May 2020||Cumulative Number of Shares/units purchased in Mandate to 31 May 2020|
|SINGAPORE TECHNOLOGIES ENGINEERING||62,429,441||2,000,000||$6,307,338||$3.15||2,000,000|
|SINGAPORE PRESS HOLDINGS||159,456,338||2,080,500||$3,120,383||$1.50||4,698,100|
|HONG FOK CORPORATION||86,147,124||335,300||$245,033||$0.73||13,422,300|
|CHUAN HUP HOLDINGS||92,827,285||1,016,900||$198,669||$0.20||2,991,700|
|THE STRAITS TRADING COMPANY||40,694,407||50,000||$78,800||$1.58||50,000|
|TUAN SING HOLDINGS||118,414,021||218,200||$50,640||$0.23||338,200|
|SINGAPORE REINSURANCE CORPORATION||60,521,978||163,200||$45,747||$0.28||7,911,800|
Source: Bloomberg, SGX (Data as of 31 May 2020).
Share buyback transactions involve share issuers repurchasing some of their outstanding shares from shareholders through the open market. Once the shares are bought back, they can be converted into treasury shares, which means they are no longer categorised as shares outstanding. Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long term capital management. Buybacks can pick up amidst market declines that are driven by broader moves on international macroeconomic developments.
The date of the relevant share buyback mandate is also provided in the table above, in addition to the amount of shares authorised to be bought back under the mandate. The total number of shares purchased under the mandate is also provided.
Share buyback information can be found on the company disclosure page on the SGX website, using the Announcement category and sub-category of Share Buy Back-On Market (click here). As best practice, companies should refrain from buying back their shares during the two weeks immediately before its quarterly financial statements and one month immediately before the full-year financial statements.
Originally Posted on June 1, 2020 – ST Engineering Leads Buyback Consideration Tally on New Mandate
Disclosure: Interactive Brokers
Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Singapore Exchange and is being posted with permission from Singapore Exchange. The views expressed in this material are solely those of the author and/or Singapore Exchange and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.