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What Investors Should Know About Share Buybacks by Singapore-Listed Companies in September 2018

Legendary investor Warren Buffett is a huge advocate of companies buying back shares – if done for the right reasons. And that is, if the company’s shares are undervalued, and the reinvestment opportunities for the business are not as appealing.

On that note, last month, 35 companies in Singapore’s stock market repurchased 32.4 million shares for a total amount of S$93.6 million, according to a report released by Singapore Exchange Limited (SGX: S68) recently. The September buyback level was 62% lower from August’s buyback amount of S$245 million, which was a 35-month record. In August, the Straits Times Index (SGX: ^STI) fell by 3.2% while in September, the index rose 1.4%. Share buybacks tend to increase when the stock market falls, and vice versa.

The top four companies with the largest share buybacks in September 2018 are also constituents of the Straits Times Index. They are: DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corp Limited (SGX: O39), City Developments Limited (SGX: C09), Singapore Exchange.

The fifth and sixth on the list were Silverlake Axis Ltd (SGX: 5CP) and Stamford Land Corporation Ltd (SGX: H07). The top six companies spent a total of S$82.7 million on share repurchases.

Stamford Land was recently in the news after the directors of the company sued minority shareholder, Mano Sabnani, in early-September for alleged defamation. On Saturday (6 October), Stamford Land’s directors and Sabnani said in a joint statement that they have arrived at an amicable settlement and are bringing the unhappy episode to a close.

HRnetGroup Ltd (SGX: CHZ) was also featured on the September share buyback list. It took the 11th spot after purchasing 800,000 shares for a total amount of around S$710,400. In August, the recruitment firm was in the sixth spot after it spent S$2.2 million in repurchasing 2.4 million shares. HRnetGroup could be an exciting growth stock with decent valuation, as explored by my Foolish colleague, Jeremy Chia, in his article here.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Singapore Exchange Limited, Oversea-Chinese Banking Corp Limited, DBS Group Holdings Ltd and HRnetGroup Ltd. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange Limited.