In September, 24 SGX primary-listed stocks bought back shares for a total consideration of S$43 million, higher than the S$15 million in consideration for August 2020, and seasonally higher than the S$15 million buyback consideration also reported in September 2019.
STI constituents Yangzijiang Shipbuilding, Keppel Corporation and ST Engineering led the buyback consideration in September. As many as 9 companies commenced new mandates, which included Ho Bee Land and Boustead Singapore.
While the STI declined 2.6% in September, together the SPDR® STI ETF and Nikko AM STI ETF added net creations of S$103 million in September as investors continued to accumulate units. The S$807 million in combined net creations for the 2 ETFS in the first nine months of 2020 is up 359% from the entire 2019 year.
Total share buyback consideration for the month of September totaled S$43.1 million, up from $15.1 million in August (click here for more) and up from up from S$2.9 million in July (click here for more). This has brought the total consideration of share buybacks for SGX primary-listed stocks to S$724 million for the first 9 months of 2020, up from S$590 million in consideration for the entire calendar year of 2019. The S$724 million represents 0.09% of the combined S$797.8 billion in market capitalisation of all stocks listed on Singapore Exchange at the end of September.
The S$43.1 million in September buyback consideration coincided with a 2.6% price decline in the Straits Times Index (STI) to 2,466.62.
The STI’s 2.6% decline in September saw its 10-day historical volatility end at 11.5%, similar to the August month-end level of 11.8%. However, during the month the STI 10-day historical volatility reached a low of 4.5%, levels not seen since January 2020. For context, on 15 June, the STI 10-day historical volatility reached as high as 34%, and as high as 80% on 25 March and 31 March.
Together, the SPDR® STI ETF and Nikko AM STI ETF garnered net creations of S$807 million over the first nine months of 2020 as investors accumulated units amidst the market declines. The S$807 million is up 359% from the total net creations of S$176 million for the entire 2019 year.
As many as 9 of the 24 companies commenced new buyback mandates in September – Ho Bee Land, Boustead Singapore, Starburst Holdings, Food Empire Holdings, Tiong Seng Holdings, Nordic Group, ecoWise Holdings, Eurosports Global and Kim Heng Offshore & Marine Holdings. This followed on from 11 companies - Keppel Corporation, AEM Holdings, First Resources, Straco Corporation, Avarga, China Sunsine Chemical Holdings, YHI International, HRnetGroup, MDR, Ban Leong Technologies and Intraco, commencing new buyback mandates in August.
The table below summarises the buyback considerations in September 2020. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.
| Stocks | Number of Shares/units Authorised for Purchase in Current Mandate |
Total Number of Shares/units Purchased in Sep 2020 |
Total Buyback Consideration (including stamp duties, clearing changes etc.) paid or payable for the shares in Sep 2020 |
Average Price Paid S$ |
Cumulative Number of Shares/units purchased in Mandate to date |
|---|---|---|---|---|---|
| YANGZIJIANG SHIPBUILDING | 391,876,520 | 17,277,700 | $16,426,385 | $0.95 | 30,004,500 |
| KEPPEL CORPORATION | 36,410,340 | 1,940,904 | $8,476,410 | $4.37 | 3,061,504 |
| ST ENGINEERING | 62,429,441 | 1,250,000 | $4,266,822 | $3.41 | 6,250,000 |
| SILVERLAKE AXIS | 264,505,273 | 11,450,100 | $3,533,839 | $0.31 | 67,145,900 |
| FIRST RESOURCES | 158,268,446 | 2,650,300 | $3,346,685 | $1.26 | 3,068,700 |
| HO BEE LAND | 33,261,530 | 1,133,700 | $2,536,179 | $2.24 | 1,133,700 |
| GLOBAL INVESTMENTS | 161,476,125 | 11,253,700 | $1,528,457 | $0.14 | 22,254,500 |
| YHI INTERNATIONAL | 29,229,581 | 1,593,800 | $569,538 | $0.36 | 1,793,800 |
| BOUSTEAD SINGAPORE | 48,714,422 | 708,800 | $489,939 | $0.69 | 708,800 |
| AEM HOLDINGS | 27,331,270 | 133,000 | $466,899 | $3.51 | 278,000 |
| CHINA SUNSINE CHEMICAL | 97,226,160 | 1,271,500 | $449,886 | $0.35 | 1,481,500 |
| STARBURST HOLDINGS | 12,171,506 | 776,200 | $318,557 | $0.41 | 776,200 |
| GKE CORPORATION | 77,617,409 | 2,000,000 | $155,868 | $0.08 | 12,357,800 |
| FOOD EMPIRE HOLDINGS | 53,597,249 | 250,000 | $149,675 | $0.60 | 250,000 |
| TIONG SENG HOLDINGS | 45,962,384 | 862,400 | $114,408 | $0.13 | 862,400 |
| NORDIC GROUP | 39,019,100 | 455,300 | $92,128 | $0.20 | 455,300 |
| ECOWISE HOLDINGS | 95,648,612 | 1,669,800 | $50,824 | $0.03 | 1,669,800 |
| EUROSPORTS GLOBAL | 26,086,770 | 202,600 | $32,604 | $0.16 | 202,600 |
| LY CORPORATION | 48,914,420 | 155,000 | $27,372 | $0.18 | 175,000 |
| INTRACO | 10,292,587 | 73,000 | $18,715 | $0.26 | 78,000 |
| MDR | 89,039,757 | 142,200 | $11,478 | $0.08 | 443,100 |
| KIM HENG OFFSHORE & MARINE | 70,820,730 | 300,000 | $9,385 | $0.03 | 300,000 |
| CHOO CHIANG HOLDINGS | 20,800,000 | 5,500 | $1,235 | $0.22 | 61,300 |
| HRNETGROUP | 100,652,263 | 2,300 | $1,130 | $0.49 | 131,000 |
| Total | 57,557,804 | $43,074,417 |
Source: SGX (Data as of 30 September 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.
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.
