In May 2021, 21 SGX primary-listed stocks bought back 36 million shares for a total consideration of S$91.1 million. This was up from 16 stocks conducting buybacks totaling $48.5 million consideration in April, and higher than the 18 stocks filing S$14.9 million in consideration in May 2020.
The STI has generated a 13.0% total return over the first five months of 2021, with the S$274 million in buyback consideration for the five months representing 0.03% of the S$899.1 billion in market capitalisation of all stocks listed on SGX as of May.
OCBC commenced a new buyback mandate in May, acquiring 4.21 million shares at an average price of S$12.16 per share. The preceding mandate saw OCBC acquire 6.66 million shares which represented 0.15 per cent of its outstanding shares excluding treasury shares.
Total share buyback consideration for month of May 2021 totaled S$91.1 million, up from S$48.5 million in April (click here) and up from S$14.9 million in May 2020 (click here). During May 2021, the Straits Times Index (“STI”) declined 1.7%, reversing April’s 1.7% price gain. For the month, dividend distributions halved the STI’s decline in terms of total return to 0.8%.
As many as 140 stocks went ex-dividend in May. This played a key role in converting a slight portion of company market value into shareholder income. For instance, while the share price of United Overseas Bank declined 52 cents from S$26.59 to S$26.07 over May, it also went ex-dividend with a 39 cent per share distribution on 6 May. Moreover, CapitaLand’s 9 cent per share dividend distribution in May more than offset its 6 cent price decline in May that reduced its market capitalisation from S$19.4 billion to S$19.0 billion.
Price moves brought the STI’s 2021 price gain over the first five months to 11.3%, with dividends boosting the total return to 13.0%.
The combined AUM of the SPDR® Straits Times Index ETF and the Nikko AM Singapore STI ETF ended May 2021 at S$2.25 billion compared to S$2.30 billion at the end of April 2021, and compared to S$1.10 billion at the end of December 2019, with the unit creations and redemptions generating S$908 million of net inflows into the two ETFs over the last 17 months.
There were 21 primary-listed stocks that bought back shares in May. Oversea-Chinese Banking Corp (“OCBC”) led the May consideration tally with 4,213,100 shares acquired at an average price of S$12.16 per share.
- In its FY20 (ended 31 Dec) Annual Report, OCBC noted shares purchased under the share buyback programme are held as treasury shares, and recorded as a deduction against share capital, and may be subsequently cancelled, sold or used to meet delivery obligations under employee share schemes. The preceding mandate saw OCBC acquire 6,660,000 shares or 0.15 per cent of its outstanding shares excluding treasury shares.
- The share price of OCBC edged higher in May, with a dividend distribution boosting the monthly returns to 2.7%. Globally, banks did extend gains in May, with the top quartile by market cap generating a 3.2% total return. Key to this, the 10 year UST yields remained stable in May, oscillating around 1.6%, resilient business investment, and no fall-outs from last week’s annual US Congressional Hearings with top bank CEOs. Just as OCBC has generated a 24.5% total return over the first five months of 2021, the top quartile of global banks by market capitalisation have generated a median 22.6% total return. OCBC has also been recipient to combined net institutional and net proprietary inflows of S$708 million over the first five months of 2021.
The table below summarises the buyback considerations in May 2021. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.
| SGX Primary Listed Stocks that Conducted Buybacks in May 2021 |
Number of Shares/units Authorised for Purchase in Current Mandate |
Total Number of Shares/units Purchased in May 2021 |
Total Buyback Consideration (including stamp duties, clearing changes etc.) paid or payable for the shares |
Average Price Paid S$ |
Cumulative Number of Shares/units purchased in Mandate to date |
Percent of Outstanding Shares (Excl. Treasury) purchased in Mandate to date |
|---|---|---|---|---|---|---|
| OVERSEA-CHINESE BANKING CORPORATION | 223,511,333 | 4,213,100 | $51,219,885 | $12.16 | 4,213,100 | 0.09 |
| WILMAR INTERNATIONAL | 631,140,890 | 3,852,900 | $18,975,632 | $4.93 | 3,852,900 | 0.06 |
| SINGAPORE EXCHANGE | 107,164,240 | 547,400 | $5,653,050 | $10.33 | 1,092,200 | 0.10 |
| AVARGA | 92,777,454 | 10,779,700 | $3,407,299 | $0.32 | 10,779,700 | 1.16 |
| SINGAPORE TELECOMMUNICATIONS | 816,457,915 | 1,190,295 | $2,879,807 | $2.42 | 1,862,446 | 0.01 |
| KEPPEL CORPORATION | 36,400,461 | 460,000 | $2,344,573 | $5.10 | 460,000 | 0.03 |
| SINGAPORE TECHNOLOGIES ENGINEERING | 62,409,095 | 500,000 | $1,907,446 | $3.81 | 1,000,000 | 0.03 |
| AEM HOLDINGS | 28,088,477 | 545,000 | $1,887,685 | $3.46 | 545,000 | 0.19 |
| GLOBAL INVESTMENTS | 159,744,243 | 10,300,000 | $1,544,088 | $0.15 | 13,000,000 | 0.81 |
| KOUFU GROUP | 55,461,640 | 1,361,100 | $913,212 | $0.67 | 1,661,100 | 0.30 |
| SANLI ENVIRONMENTAL | 18,832,912 | 968,200 | $63,282 | $0.07 | 968,200 | 0.36 |
| HC SURGICAL SPECIALISTS | 15,104,573 | 128,000 | $60,320 | $0.47 | 2,153,500 | 1.43 |
| NORDIC GROUP | 28,195,900 | 174,800 | $46,176 | $0.26 | 174,800 | 0.05 |
| GLOBAL PALM RESOURCES HOLDINGS | 25,053,418 | 206,000 | $42,362 | $0.21 | 206,000 | 0.08 |
| JAPAN FOODS HOLDING | 17,385,720 | 100,000 | $39,729 | $0.40 | 100,000 | 0.06 |
| ENGRO CORPORATION | 11,861,010 | 27,600 | $35,298 | $1.28 | 120,000 | 0.10 |
| FOOD EMPIRE HOLDINGS | 53,774,969 | 24,800 | $21,892 | $0.88 | 124,800 | 0.02 |
| KIM HENG OFFSHORE & MARINE HOLDINGS | 70,790,730 | 465,200 | $17,790 | $0.04 | 465,200 | 0.07 |
| TUAN SING HOLDINGS | 118,736,488 | 25,000 | $10,047 | $0.40 | 25,000 | 0.00 |
| CHOO CHIANG HOLDINGS | 20,785,240 | 40,000 | $9,632 | $0.24 | 237,600 | 0.11 |
| TREK 2000 INTERNATIONAL | 31,350,142 | 40,000 | $5,194 | $0.13 | 40,000 | 0.01 |
| Total | 35,949,095 | $91,084,399 |
Source: SGX, Bloomberg, Refinitiv (Data as of 31 May 2021)
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 semi-annual financial statements and one month immediately before the full-year financial statements.
