• In 1H21, 59 Singapore primary-listed stocks conducted buybacks with a total consideration of S$368 million, down from S$663 million in 1H20 and up from S$325 million in 1H19. Five STI constituents - OCBC, Wilmar, SGX, Singapore Tech Engineering and Keppel Corp led the 1H21 consideration tally.
   
• In June 2021, 28 companies bought back their shares with a total consideration of S$94.0 million, up from 21 companies buying back shares in May, with a total consideration of S$91.1 million. Last month’s buyback consideration was also up from S$12.6 million in June 2020.
   
• OCBC, Wilmar, Singapore Tech Engineering, SGX and The Hour Glass led the consideration tally in June. The Hour Glass commenced a new mandate in June, as did another 13 stocks. Avarga has bought back 1.7% of its shares (excl. treasury shares) since the new mandate commenced on 23 April.

Total share buyback consideration for the first half of 2021 (“1H21”) amounted to S$368 million, with 59 companies conducting buybacks. The buyback consideration was down from the 81 stocks buying back S$663 million in combined consideration in 1H20, largely attributed to volatility in March 2020 (click here for more). The 1H21 was up, however, from the combined S$325 million buyback consideration in 1H19.

As discussed here, while the STI declined 1.1% in 2Q21, this was the strongest first half of a year for the STI since 2017, with the STI generating an 11.9% total return in 1H21, compared to a 13.8% total return in 1H17. The combined AUM of the SPDR® Straits Times Index ETF and the Nikko AM Singapore STI ETF ended June 2021 at S$2.25 billion, compared to S$2.08 billion at the end of December 2020 and compared to S$1.10 billion at the end of December 2019, with the unit creations and redemptions generating S$923 million of net inflows into the two ETFs over the last 18 months.

The 10 companies that led the buyback consideration tally for primary-listed Singapore stocks in 1H21 are tabled below. Combined, these 10 stocks made up more than 90% of the S$368 million in total buyback consideration. The S$368 million in consideration represents 0.04% of the S$902 billion total market capitalisation of all stocks listed on Singapore Exchange as of 30 June. 

 Source: SGX (Data as of 30 June 2021)

The table below summarises the buyback considerations in June 2021. The table is sorted by the value of the total consideration amount for the month, which combines the amount of shares or units purchased and the purchasing price of the transactions.

According to the filings, 14 of the stocks commenced new buyback mandates in June, which included The Hour Glass, MDR, Maxi-Cash Financial Services Corporation, Wing Tai Holdings, Telechoice International, JEP Holdings, First Resources, Sarine Technologies, China Sunsine Chemical Holdings, Straco Corporation, Venture Corporation, Goodland Group, SUTL Enterprise and Samurai 2k Aerosol. 

 Source: SGX (Data as of 30 June 2021)

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 can be converted into treasury shares, which means they are no longer categorised as shares outstanding. Motivations for share buybacks can include employee compensation plans (such as share option schemes or employee share purchase plans) or long term capital management. Buybacks can pick up amidst market declines that are driven by broader moves on international macroeconomic developments.

Share buyback information can be found on the company disclosure page on the SGX website, using the Announcement category and sub-category of Share Buy Back-On Market (click here). As best practice, companies should refrain from buying back their shares during the two weeks immediately before semi-annual financial statements and one month immediately before the full-year financial statements.