Listed firms buying back shares amid declining prices
A number of listed companies bought back their own shares from the open market in recent days to affirm their optimism on underlying corporate fundamentals in the aftermath of big block sales that had spooked investors last week.
Aside from DigiPlus — which had earlier announced a P6-bilion stock repurchase program — Ayala Land Inc., Cebu Air, Alliance Global Group Inc. and Petron Corp. all recently picked up shares from the market in line with their ongoing stock repurchase programs, based on regulatory filings.
It’s not just the companies themselves buying their own stocks. Key company officers of top companies are putting their money where their management team is.
Bank of the Philippine Islands (BPI) president Teodoro Limcaoco, for instance, bought on July 21 about 80,000 shares of BPI at prices ranging between P123.60 and P125.60 per share. His total equity interest in the bank now stood at about 2.64 million shares or 0.05 percent.
In the case of Ayala Land, the property giant purchased 700,000 at prices ranging between P25.70 and P25.90 on July 21. It now has about 2.15 billion common shares lodged in its treasury.
Cebu Air bought 105,000 shares between P36.70 and P37.20 on July 21. This is part of the P2-billion stock buyback budget announced by the Gokongwei-led carrier in November 2024. Out of the total allotment, nearly P1.6 billion has yet to be deployed.
AGI bought 136,000 shares between P8.16 per share or P8.27 per share on July 21.
The conglomerate founded by tycoon Andrew Tan has so far used up P9.18 billion out of the P11-billion buyback program that started in October 2021.
Petron repurchased shares several times this month. It has now accumulated about 461.78 million shares in its treasury. It has also disbursed P1.13 billion out of its P1.52-billion buyback budget.
For its part, Fruitas has been buying back shares regularly since March this year, soon after announcing a P100-million war chest.
Oriental Petroleum has been buying back shares since July this year. This was after getting board imprimatur to allot P200 million for this program.
Companies with sufficient earnings typically resort to stock buybacks when they feel that their shares are undervalued by the market.
As the number of outstanding shares decreases when a company buy backs its own shares, this activity often leads to improvement in earnings per share. It also leads to share price appreciation as it is taken as a signal of management confidence.
Notably, most of the buying activities were recorded on July 21.
This showed that the companies stood ready to defend their stocks in the aftermath of last week’s big block sales on blue chips SM Investments Corp. and SM Prime Holdings.
The P12.6-billion block sale by an unidentified institutional investor triggered risk aversion last week, but stock buybacks and bargain hunting allowed the local stock barometer to firm up this week.
