Thai companies’ move to buy stocks backs seen as injecting positive sentiment in market

[rooster59]

Thai companies’ move to buy stocks backs seen as injecting positive sentiment in market

By The Nation

 

 

Many Thai listed companies aim to buy back their stocks as prices fall.

 

 

In the last week, four listed companies announced plans to buy back stocks.

 

Kasikornbank (KBank) said it would buy back 23.93 million stocks, accounting for 1 per cent of all paid-up shares, with a credit limit of Bt4.6 billion from February 14 to 27 this year.

 

Ch Karnchang (CK) will buy 169.38 million shares, accounting for 10 per cent of all paid-up shares, with a credit limit of Bt3 billion from March 2 to September 1, while Supalai (SPALI) will buy 120 million shares -- 5.6 per cent of all paid-up shares -- with a credit limit not exceeds Bt2 billion from February 12 to August 11.

 

TPI Polene (TPIPL) said it would buy back 383.61 million shares -- 2 per cent of all paid stocks -- with a credit limit not exceeding Bt800 million from February 14 to August 13.

 

The Stock Exchange of Thailand (SET) also found that in the previous month, 10 listed companies had bought back some 165.03 million shares valued at Bt270.08 million.

 

Meanwhile, executive vice president of Asia Plus Securities, Therdsak Thaveeteeratham, said that fluctuations in the stock market would encourage many listed companies to buy back stocks, while it signals that the company’s stock is priced lower than its true value.

 

“This will help create confidence among investors, while it will benefit the stock price in the short term because the stock price will rise for one month after they announce their buy-back move.”

 

He explained that according to the data of 42 listed companies in the past 10 years, most of them often bought back stocks when the market fluctuation was high, while the SET Index often responded positively and rebounded in the next phase.

 

“This is probably because investors have responded to signals sent by executives that the share price has an interesting valuation for investment,” he said.

 

“However, for the stock price to continue rising, other environmental conditions, especially the support from fund inflows, would be crucial factors.”

 

According to the research team’s analysis of the period of investment in buying back stocks in the past 10 years, the most suitable period is on the day of the announcement to make a profit in the next month.

 

“This period offers the opportunity to receive an average return of approximately 2.6 per cent (some companies return more than 10 per cent) because buying back of stocks is aimed at supporting the share price, while there will be expectations of an increase in earnings per share from a decrease in the number of shares. It also signals that the company’s executives think its shares are undervalued,” the member of the research team said.

 

Source: https://www.nationthailand.com/news/30381425

 

-- © Copyright The Nation Thailand 2020-02-02

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[legend49]

“This will help create confidence among investors, while it will benefit the stock price in the short term because the stock price will rise for one month after they announce their buy-back move.”

 

LOL the beginning of a new PONZI strategy. Investors should learn short selling techniques.

[Srikcir]

8 hours ago, rooster59 said:

“This period offers the opportunity to receive an average return of approximately 2.6 per cent (some companies return more than 10 per cent) because buying back of stocks is aimed at supporting the share price, while there will be expectations of an increase in earnings per share from a decrease in the number of shares. It also signals that the company’s executives think its shares are undervalued,”

This sounds like a Pump-and-Dump is a scheme that attempts to boost the price of a stock wherein  perpetrators of this scheme already have an established position in the company's stock and sell their positions after the hype has led to a higher share price.

Edited February 2, 2020 by Srikcir
ms

[khunPer]

Now might be a good time to buy up in healthy companies that are down due to market panic...????

[mshs]

11 hours ago, khunPer said:

Now might be a good time to buy up in healthy companies that are down due to market panic...????

Buffett's “fearful when others are greedy and greedy when others are fearful” has been misquoted and estrogenized that it is almost the Gospel.

The man said that market-timing is bad for an investor and if one insists on timing the market then "be fearful ...."