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What Investors Should Know About Share Buybacks by Singapore-Listed Companies in January 2019

According to a recent report released by the Singapore Exchange (SGX), 21 companies bought back 30.2 million shares or units for a total amount of S$26.4 million last month. The latest buyback is down from December 2018’s figure of S$78 million and January 2018’s amount of S$54 million.

The top five companies with the most significant share buyback amount in January 2019 were:

1) Oversea-Chinese Banking Corporation Limited (SGX: O39);

2) Keppel REIT (SGX: K71U);

3) Silverlake Axis Ltd (SGX: 5CP);

4) Venture Corporation Ltd (SGX: V03); and

5) Singapore Post Limited (SGX: S08).

Keppel REIT’s manager has been regularly buying back the REIT’s units since July 2018. As mentioned in a previous article here, Keppel REIT repurchasing its units could be a signal to the market that its units are undervalued. The REIT’s manager stated during its earnings release for the 2018 second-quarter that it would “only purchase units when it is accretive to distribution and net asset value per unit”. As of yesterday’s close of S$1.19, Keppel REIT had a price-to-book ratio of 0.8 and a dividend yield of 4.7%.

Silverlake Axis, Global Investments Limited (SGX: B73) and ISEC Healthcare Ltd (SGX: 40T) commenced their new buyback mandates last month. A company that wishes to buy back its shares has to obtain shareholder approval, and this is valid until the next annual shareholders’ meeting organised by the company.

Payment solutions provider Silverlake Axis repurchased 7.15 million shares for around S$2.9 million in January 2019. The SGX report also added that it is the first time ISEC Healthcare is repurchasing its shares since listing. The company’s initial public offering took place in October 2014. Last month, ISEC Healthcare bought back 386,400 shares for a total amount of slightly below S$105,300. ISEC Healthcare’s share price closed at S$0.27 yesterday. At that price, the medical eye care service provider was selling at a price-to-earnings ratio of 17 and had a dividend yield of 5.5%.

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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 and Oversea-Chinese Banking Corporation Limited. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange Limited.