November's share buyback value up 74% month-on-month to S$39.4m: SGX

SHARE buyback volume and value bounced back in November from the month before, after hitting a trough in October.

22 listed companies repurchased some 27.7 million shares, worth S$39.4 million in all.

The value of the buyback was up by 74 per cent on the S$22.6 million reported in the previous month, or the fourth highest monthly consideration in 2017, according to the Singapore Exchange (SGX) My Gateway investor education portal.

But that value was still down by 1.5 per cent when compared with the same period a year earlier.

Altogether, companies have bought back S$383 million in shares in the first 11 months of 2017, a drop of 53 per cent on the S$818 million for the first 11 months of 2016.

Reinvested dividends have boosted the total return of the bourse's benchmark Straits Times Index to 22.2 per cent in the past year, said the SGX My Gateway report, on a rally of 18.2 per cent.

More than 90 per cent of November's buyback consideration was driven by just five stocks.

Oversea-Chinese Banking Corporation topped the list for the ninth straight month, repurchasing S$21.53 million worth of shares in November.

The other top counters involved in buybacks were Silverlake Axis, Sembcorp Marine, Singapore Post and ST Engineering.

Meanwhile, six stocks started buyback mandates in November.

Catalist-listed HC Surgical Specialists, a medical services group which focuses on endoscopic and colorectal procedures, led the buyback tally by picking up 459,900 shares for nearly S$321,000.

GK Goh Holdings, Japan Foods Holdings, Kim Heng Offshore & Marine Holdings, Mun Siong Engineering and USP Group also began buyback mandates.

All six stocks conducted multiple buyback transactions in November, the SGX My Gateway report noted.

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 are converted into treasury shares and are no longer classified as outstanding.

Companies buy back their own shares for a variety of reasons, from ownership consolidation to taking advantage of undervaluation.

They may also buy back shares with an eye to boosting financial ratios, such as earnings per share, which grow bigger if the number of outstanding shares shrinks.

Blue-chip firms could also buy back stock as treasury shares so they can issue them to staff as part of their performance incentives.