In this article, we examine share buybacks, for which a mandate
will be sought by many of Singapore's listed companies from
shareholders this year. Share buybacks may play a role of increased
importance as continued weakness in the stock market is met with
increasing protests from management that selling is overdone and
shares are undervalued.
Share buybacks – increasing in favour
Fears over global growth and strong risk aversion have,
unfortunately, prevailed for much of this first quarter of the
year. Singapore's market barometer, the Straits Times Index,
has declined by 17% over the past 12 months. Several stocks have
even been trading at below book value.
It is therefore perhaps unsurprising that Singapore's listed
companies bought back S$2 billion worth of shares on the SGX in
2015, almost double the activity during the financial crisis of
2008 of S$1.071 billion. In particular, our local banks have been
buying heavily – the Straits Times reported that UOB
