Wilmar buybacks fail to stem stock's biggest drop in 15 months

[SINGAPORE] Wilmar International Ltd, trader of almost half the world's palm oil, failed to stem the worst weekly decline in its shares in 15 months even after conducting three stock buybacks in as many days.

The trading company accumulated almost 5 million shares, or 0.08 per cent of its shares outstanding, for S$15.2 million, according to filings with the Singapore stock exchange. The buyback was Wilmar's first since October 2014.

That didn't stop the stock from falling 4.7 per cent this week, compared with a 2.7 per cent decline in the Singapore benchmark. The move only served to bolster weekly trading volume to more than 40.8 million shares from the six-month average of 28.4 million.

"We have bought back the shares at about the same levels as in the past because we believe that Wilmar is undervalued at these price levels," the trader said in an e-mailed response to questions. The company declined to specify future buyback plans.

The company paid an average of S$3.03 a share, according to Bloomberg calculations. The shares fell 0.7 per cent to S$3.03 as of 2:38 pm in Singapore Friday, extending their decline this year to 6.5 per cent.

Almost half of Wilmar's revenue relies on China, where this week's surprise devaluation of the currency pushed lower the price of raw materials, including food commodities such as palm oil.

BLOOMBERG