Toyota plans 100b yen buyback with shares trending down

[TOKYO] Toyota Motor announced a 100 billion yen (S$1.1 billion) stock buyback on Wednesday (Mar 23), delivering on a promise to flexibly repurchase shares and pay out stable dividends to shareholders.

With Toyota shares trading more than 10 per cent off recent highs, the Japanese automaker said it was taking the current stock price into account and being "more flexible" than ever in its implementation of buybacks, according to a statement to the Tokyo Stock Exchange.

The buyback announcement comes as the top-selling automaker's shares have taken a hit in recent months as it faces a windfall of disruptions.

Toyota's factories have been halted recently due to a cyberattack on one of its suppliers, a powerful earthquake in Japan and a Covid outbreak in the Chinese city of Changchun. Toyota's shares closed in Tokyo on Wednesday almost 12 per cent off a record close in January.

Toyota's decision came at "bargain timing" given current stock prices, said Bloomberg Intelligence analyst Tatsuo Yoshida.

While the size of the buyback may be small relative to the company's market capitalisation, it's a "positive" for Toyota's shares, and a sign that the company is "steadily doing what it says it'll do" in terms of flexibly acquiring shares and paying steady dividends, Yoshida said.

Buybacks have been on investors' minds this week in Asia, after shares in Alibaba Group Holding surged following its announcement of an expanded US$25 billion repurchase. Investors are betting that Tencent Holdings could be next to jump on the bandwagon.

Toyota will repurchase the shares from Thursday through May 10, around the time the carmaker typically announces full-year earnings. BLOOMBERG