• In 2021, 85 primary-listed Singapore stocks bought back shares with consideration totalling S$1.186 billion, following on from 100 primary-listings buying back S$1.035 billion in shares in 2020, and close to 80 primary-listings buying back S$590 million in shares in 2019.
   
• Secondary-listed Jardine Matheson and Hongkong Land also conducted buybacks under programmes that target to return up to US$500 million to Jardine Matheson shareholders by 30 June 2022 and US$500 million to Hongkong Land shareholders by 31 Dec 2022.
   
• For the month of December, CapitaLand Investment led the buyback consideration tally for primary-listed STI stocks repurchasing 33.6 million shares at an average price of S$3.35 per share. Raffles Medical led the buyback consideration tally of non-STI stocks, repurchasing 2.4 million shares at an average price of S$1.33 per share.

Buyback Consideration by Primary-Listed stocks Reached a Three-year High in 2021

In December, 36 primary-listed Singapore companies conducted share buybacks, with the total consideration amounting to S$216.4 million. This was a similar pace to the 33 primary-listed companies that bought back shares, with S$274.8 million in total consideration over November. The notch-up in buybacks towards the end of 2021 brought the total buyback consideration of primary-listed companies in 2021 to S$1.186 billion, up from S$1.035 billion in 2020, and up from S$589 million in 2019.

The $1.186 billion in buyback consideration in 2021 represented 0.18% of the total market value of all primary-listed stocks listed on SGX as of the end of 2021. Of the S$896.9 billion in total market capitalisation for all stocks listed on SGX at the end of 2021, S$650.6 billion was represented by primary-listed stocks.

The 2021 buyback consideration tally was led by STI stocks Oversea-Chinese Banking Corporation, CapitaLand Investment, Wilmar International, United Overseas Bank and Singapore Exchange. In 2020, the buyback consideration tally was also led by STI stocks, which in that year included DBS Group Holdings, Wilmar International, Oversea-Chinese Banking Corporation, Yangzijiang Shipbuilding (Holdings) and Singapore Technologies Engineering. The leaders of the buyback consideration tally in 2020 were similar to 2019, with Keppel REIT making the top five in 2019, rather than Wilmar International.

Together the 20 primary-listed stocks that filed the highest buyback considerations in 2021 made up 96% of the entire consideration of S$1.186 billion. This was similar to the preceding year, when the 20 stocks that filed the highest buyback considerations in 2020 accounted for 94% of the entire consideration of S$1.035 billion (for a list of the 20 primary-listed stocks with the highest buyback considerations in 2020, click here). The 20 primary-listed stocks with the highest buyback considerations in 2021 are tabled below.

 Source: SGX, Refinitiv, Bloomberg (Data as of 31 Dec 2021)

Hongkong Land Holdings & Jardine Matheson Holdings

Back on 6 Sep, secondary-listed Hongkong Land Holdings announced it would invest up to US$500 million in a share buyback programme extending to 31 December 2022. The company also noted that the buyback was in line with its long-standing capital allocation practice which is firstly to prioritise investment in new assets to drive long-term growth and shareholder value, secondly to facilitate the continued payment of steady and, over time, increasing dividends; and thirdly invest in existing assets on an opportunistic basis, including through share buybacks.

From 6 Sep through to 31 Dec, Hongkong Land Holdings was the strongest performing STI constituent, with a 24.3% price gain, with the company commencing the buyback programme on 7 Sep. The share buybacks that were conducted by Hongkong Land Holdings in 4Q21 saw the company’s number of issued ordinary shares decline by 1.4%.

On 30 Sep, secondary-listed Jardine Matheson Holdings also announced it would invest up to US$250 million in a share buyback programme extending to 30 June 2022. On 8 Dec, the company announced it would extend to buyback programme from US$250 million to US$500 million, and that as of 8 Dec, it had already acquired close to US$250 million of shares under the programme. From the time of the initial announcement ahead of the 30 Sep trading session, through to 31 Dec, Jardine Matheson Holdings was among the top five performing STI constituents. Note that Jardine Matheson Holdings’ market capitalisation more than triples that of Hongkong Land Holdings.  

CapitaLand Investment Bought Back S$113 Million in Shares in December

The December buyback consideration of S$216.4 million coincided with the STI generating a 2.7% price gain, finishing the year at 3,123.68, with dividends boosting the December total return to 2.9%. For the 2021 year, the STI generated a price gain of 9.8%, with reinvested dividends boosting the total return to 13.6% (click here more). The combined AUM of the SPDR® Straits Times Index ETF and the Nikko AM Singapore STI ETF ended 2021 at S$2.23 billion with net outflows of S$60 million over the year. This compared to AUM of S$2.08 billion at the end of December 2020, which had been bolstered by S$947 million of net inflows in 2020.

For the month of December, CapitaLand Investment led the buyback consideration tally for primary-listed STI stocks, repurchasing 33.6 million shares at an average price of S$3.35 per share. As of 31 Dec, CapitaLand Investment had bought back 1.21% of their issued shares (excluding treasury shares) since commencing buybacks under the current mandate on 12 Oct. Raffles Medical Group led the buyback consideration of non-STI stocks in December, repurchasing 2.4 million shares at an average price of S$1.33 per share.

The table below summarises the buyback transactions of the 36 primary-listed stocks that conducted buybacks in December. 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.  

 Source: SGX, Refinitiv, Bloomberg (Data as of 31 Dec 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 have also been observed to broadly pick up amidst market declines that are driven by 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.