A number of listed companies at the Philippine Stock Exchange have instituted share buyback programs in recent years, primarily to shore up sagging stock prices, or at least provide some stability to the shares’ value.
In another sense, share buybacks are a way for companies to return to shareholders excess capital, especially during slow business cycles like in recent years when economic activity was hobbled by the pandemic.
Returning funds to shareholders also help companies reduce capital cost and improve their financial ratios.
Of the seven companies that reported to the Philippine Stock Exchange on Monday, property developers Megaworld Corp. and Robinsons Land Corp. show still substantial amounts left in their war chests to repurchase the shares—with less than half of the allocated amounts spent.
Megaworld has so far used up P2.11 billion, or 42 percent, of the P5 billion it budgeted in 2020 for a two-year program meant to improve shareholder value in the face of a bearish market. The buyback was extended for a year and will end on February 28.
Robinsons Land, meantime, used a total P2.88 billion, or 48 percent, of the P6 billion it had set aside for the shares repurchase. It bought from shareholders a total 161.1 million shares, or 3% of the outstanding shares prior to the program.
Robinsons Retail Holdings Inc. is almost through with its P6-billion shares buyback, with only P544.5 million left, securing a total 97.8 million or 6 percent of its outstanding shares prior to the repurchase.
Metro Retail Stores Group Inc. has only P91 million, or less than one-third of the P300 million it budgeted for the buyback. Cosco Capital Inc. already spent P1.44 billion of the P2 billion it set aside for the program while SFA Semicon Philippines Corp. still has P74.3 million on hand out of the P130 million it set aside for the program.
Diversified company Alliance Global Group Inc. has spent P6.15 billion of the P7 billion allocated to buy back shares from stockholders.
In its unclear at this stage whether these listed companies will extend further their share buyback programs or if more will join their ranks amid shocks to economic activity.
