In April, almost 40 SGX primary-listed stocks bought back shares for a total consideration of S$36 million. This was lower than the S$501 million in consideration for March 2020, and in-line with the S$36 million consideration filed for April 2019.
OCBC, Hong Fok Corporation, SPH, Silverlake Axis and Global Investments led the April consideration tally, accounting for 72% of the total consideration. Global Investments has bought back 6.7% of its issued shares (excluding treasury shares) on the current mandate.
5 stocks commenced buyback mandates in April: SATS, Chuan Hup Holdings, Ellipsiz, Chip Eng Seng Corporation and Zhongmin Baihui Retail Group. SATS bought back 535,000 shares in April at an average price of S$2.934 per share.
Total share buyback consideration for month of April 2020 totaled S$36.3 million, down from S$501.5 million in March 2020 (see Market Declines Saw 65 Stocks Conduct Share Buybacks in March 2020) and similar to S$35.5 million in April 2019. This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$635 million for the first four months of 2020, up from the S$590 million in consideration for the entire calendar year of 2019 (see SGX Primary-Listed Stocks Bought Back S$590 Million in Shares in 2019).
The Straits Times Index (STI) gained 5.8% in April, rising to 2,624.23 as its 10-day historical volatility declined to 18%, from 80% at the end of March. This brought the STI’s decline in total return for the first four months of 2020 to 18.1%, with the FTSE ASEAN All-Share Index declining 19.8%.
Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$320 million over the first four months of 2020 as investors accumulated units amidst the market declines. The S$320 million was is up 82% from the total net creations of S$176 million for the entire 2019 year.
Singapore Exchange has been the strongest of the STI constituents over the four months with 9.9% total return, whilst SATS has seen the biggest decline in total return, with a decline of 35.2% over the four months. SATS decline over the four months trimmed its 10-year annualised total return to 6.5%.
SATS was also one of five stocks to commence new share buyback mandates in April. The company bought its shares back over five sessions spanning 1 April to 7 April, buying back a total of 535,000 shares at an average price of S$2.93 per share (including stamp duties, clearing changes etc.). According to filings, Chuan Hup Holdings, Ellipsiz, Chip Eng Seng Corporation and Zhongmin Baihui Retail Group also commenced new buyback mandates.
April 2020 Buybacks Consideration Normalises to S$36 Million
A total of 38 primary-listed stocks conducted buybacks in Singapore in April, down from 65 in March, and up from 17 stocks in February.
Global Investments’ current mandate has seen the company buy back 6.67% 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 9.3% in the first four months of 2020, and has also proposed the renewal of the Share Buyback Mandate at the AGM currently scheduled for 29 June 2020.
The table below summarises the buyback considerations in April 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 five companies that commenced buyback mandates are in bold.
|Total Number of
stamp duties, clearing
changes etc.) paid
or payable for the
shares in April 2020
|Average Share Price
Paid (including stamp
of Shares/units purchased
in Mandate to
30 April 2020
|OVERSEA-CHINESE BANKING CORPORATION||212,257,935||1,930,000||$16,700,436||8.653||17,225,800|
|HONG FOK CORPORATION||86,147,124||4,865,200||$3,365,461||0.692||13,087,000|
|SINGAPORE PRESS HOLDINGS||159,456,338||1,567,600||$2,297,446||1.466||2,617,600|
|KEPPEL INFRASTRUCTURE TRUST||249,707,588||3,300,000||$1,351,012||0.409||4,750,000|
|LUM CHANG HOLDINGS||38,048,630||2,892,300||$957,233||0.331||3,798,200|
|SINGAPORE REINSURANCE CORPORATION||60,521,978||2,292,900||$619,766||0.270||7,748,600|
|Q & M DENTAL GROUP (SINGAPORE)||78,562,192||1,375,000||$507,662||0.369||4,153,200|
|CHUAN HUP HOLDINGS||92,827,285||1,974,800||$387,771||0.196||1,974,800|
|CHINA SUNSINE CHEMICAL HOLDINGS||98,262,340||612,300||$181,001||0.296||10,361,800|
|TUAN SING HOLDINGS||118,620,496||489,000||$107,973||0.221||5,813,200|
|CHIP ENG SENG CORPORATION||62,601,406||92,800||$46,479||0.501||92,800|
|ZHONGMIN BAIHUI RETAIL GROUP||19,182,570||30,000||$18,949||0.632||30,000|
|JAPAN FOODS HOLDING||17,360,290||50,000||$14,584||0.292||135,700|
|ST GROUP FOOD INDUSTRIES HOLDINGS||24,600,000||45,000||$10,169||0.226||3,296,500|
|STAMFORD LAND CORPORATION||81,973,408||20,000||$6,019||0.301||36,771,700|
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. 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.