Share buybacks are good for shareholders if done for the right reasons, and that is if the company’s shares are undervalued, and there are no other reinvestment options for the company. On that note, let’s look at three Singapore shares that have repurchased their shares thus far during the week, as of the market open on Friday.
Oversea-Chinese Banking Corp Limited (SGX: O39)
Oversea-Chinese Banking Corp Limited, or OCBC for short, is one of the three major banks in Singapore. On 10, 11, 12 and 13 June 2019, OCBC repurchased a total of 600,000 shares at a price range of between S$10.72 and S$10.81 per share. The total cost came up to around S$6.47 million.
For OCBC’s 2019 first-quarter, total income grew 15% year-on-year to S$2.68 billion, while net profit rose 11% to S$1.23 billion on the back of record high operating profit. Chief executive, Samuel Tsien, summarised the bank’s latest performance in the earnings release:
“Our strong first quarter 2019 results demonstrated the underlying strength of the Group’s banking, wealth management and insurance franchise which drove our operating profit to a new high. Record net interest income was boosted by asset growth and higher NIM [net interest margin]. Market-related income has benefitted from favourable financial market conditions, contributing to higher non-interest income. Our wealth management business continued to perform well, as fee income strongly rebounded from the previous quarter and private banking AUM climbed to new highs, driven by sustained net new money inflows in Bank of Singapore.”
OCBC’s shares closed at S$10.77 apiece on Thursday. This translates to a price-to-book (PB) ratio of 1.08 and a dividend yield of 4%.
Olam International Ltd (SGX: O32)
Olam is a commodity company supplying food, ingredients, and feed to around 20,000 customers worldwide. On 10, 11, 12 and 13 June, Olam bought back a total of 375,000 shares at a price range of between S$1.86 and S$1.92 per share. It spent slightly more than S$708,000 in all.
Olam had a great start to 2019 as well. First quarter revenue rose 16.7% year-on-year to S$7.35 billion while net profit climbed 6.9% to S$168.8 million. As for its plans in the years ahead, the company said:
“Olam will continue to execute on the four strategic pathways for growth as set out in the 2019-2024 Strategic Plan. It will strengthen, streamline and focus its business portfolio, drive margin improvement by enhancing cost and capital efficiency, generate additional revenue streams by offering differentiated products and services, and explore partnerships and investments in new engines for growth.”
Olam’s shares closed at S$1.92 apiece on Thursday. The share price gives it a trailing price-to-earnings (PE) ratio of 20 and a dividend yield of 3.9%.
Koufu Group Ltd (SGX: VL6)
Koufu is an operator and manager of food courts and coffee shops in Singapore. On 13 June, Koufu repurchased 99,300 shares at S$0.6829 apiece, translating to a total amount of slightly below S$68,000.
The food court operator had a respectable set of results for its 2019 first-quarter. Quarterly revenue increased by 4.9% year-on-year to S$57.8 million due to higher contributions from both the outlet and mall management, and F&B retail segments. With that, net profit was lifted by 12.3% to S$7.0 million.
Pang Lim, Koufu’s executive chairman and chief executive, said the following in the earnings release:
“We are pleased to have achieved a strong start for the year. We remain firmly focused on the expansion of our market share in food courts and coffee shops, growing our F&B concept stores, and bringing new food options and varieties to consumers both locally and in the region, leveraging on our distinct portfolio of brands.”
Shares of Koufu ended Thursday at S$0.685 each, giving it a trailing PE ratio of 14 and a dividend yield of 3.2%.
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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 Oversea-Chinese Banking Corp Limited. Motley Fool Singapore contributor Sudhan P does not own shares in any companies mentioned.